Aichi Steel to buy 11% stake in India's Vardhman Special Steels, give technical aid
NEW DELHI, NNA - Aichi Steel Corp., an affiliate of Japan’s Toyota Motor Corp., will buy an approximately 11-percent stake in Vardhman Special Steels Ltd. and provide technical assistance to the Indian manufacturer, aiming to establish a future foothold for supplying materials for its forging business in Southeast Asia.
The two companies signed an agreement on the deal worth some 740 million yen ($7 million) in a ceremony held on Tuesday in Aichi Prefecture where the Japanese firm is located. The partnership will help Aichi Steel “strengthen the foundation of its special steel business by improving quality and cost competitiveness on a global basis,” the company said in a statement.
“The transaction is expected to be completed in late September,” an Aichi Steel spokesman told NNA. Aichi Steel plans to station a number of Japanese staffers at Vardhman to provide technical assistance, as well as dispatch Japanese technicians on a temporary basis to bolster cooperation, he said.
As a member of the Toyota Motor group, Aichi Steel engages in manufacturing and marketing steels, forged products and electro-magnetic products with a focus on special steels for motor vehicles.
Aichi Steel has forging business bases in Thailand, the Philippines and Indonesia, and the partnership with Vardhman will support its initiative toward “supplying steel materials on a stable basis in the future” to these Southeast Asian bases, the statement said.
Founded in 1973, Vardhman is headquartered in Ludhiana in the northern state of Punjab. The company mainly manufactures bars of special steels for motor vehicles and motorcycles. In the year to March 2019, its production amounted to 180,000 tons, with sales totaling about $170 million.