Maruichi Steel Tube Enters Indian Stainless Tube Market

Maruichi Steel Tube will acquire a 95% equity in Kuma Stainless Tube, Indian stainless steel tube maker, within this month and enter Indian stainless steel tube market. Maruichi will pay 455 million rupee for an acquisition. Maruichi becomes to operate offshore busieness sites in 5 countries: USA, Indonesia, Vietnam, China and India. Maruichi purchases the shares from Kusakabe Electric & Machinery, Japanese pipe machine maker, and plans to take the rest 5% after 2 years. Maruichi invests for business reinforcement of Kuma Stainless Tube to supply stainless tube for automobile or motorcycle makers in India.

Maruichi advances the expansion of overseas businesses and new businesses to achieve annual sales at 160 billion yen, recurring profit at 26 billion yen and Return of Equity at 8% in fiscal 2011 ending in March 2012. The demand for stainless tube is increasing in India along economic recovery after global deterioration in 2008. Automobile and motorcycle market is expanding rapidly.

Kusakabe considered it is better that Kuma receives helps from Maruichi as to material procurement or equipment investment. Maruichi sends 2 engineers to Kuma next spring and eyes mid-term supports in fund and capacity expansion.

Kuma was established by Kusakabe in November 2003. Kusakabe holds 100% share in Kuma.

Kuma operates a plant in Haryana province, India. The plant has 2 pipe lines to produce stainless steel tube and aluminum plating tube at 700 tonnes per month. Kuma’s market share in India is about 70% for sutomotive stainless tube. Kuma’s sales were 1.17 billion yen for a full business year ended in March 2009 with net profit at 25 million yen.