Japan-based heat treatment company Dowa Thermotech plans to raise its holding in the Indian firm Hightemp Furnaces Ltd to 80 per cent for an undisclosed sum, the company has disclosed in a statement on Wednesday. However, Japan’s largest business newspaper, the Nikkei, estimates the deal value to be around ¥2-¥3 billion or Rs 190 crore. Dowa Thermotech holds 16.1 per cent in Hightemp Furnaces as of June 2011.
“The share acquisition date has been scheduled for September-end, with Dowa Thermotech acquiring up to 80 per cent of shares outstanding in the HTF at that time,” the company has been quoted as saying on the .
Incorporated in 1970, Hightemp Furnaces is a leading manufacturer of heat treat furnaces, with commercial heat treatment divisions located at the industrial clusters of Delhi, Gurgaon, Pune, Bangalore and Chennai. The company has annual net sales of Rs 95 crore in FY11 and currently employs 300 people across the country.
Dowa Thermotech Co. Ltd is a subsidiary of Dowa Holdings Ltd, with a total sales turnover of approximately $4 billion and interests in varied segments, such as metals smelting, ecosystems, heat treatment and rare earth.
Post-acquisition, the Dowa Group will expand in the Indian market by adding the company’s manufacturing technologies and network with Japanese customers to HTF’s business base.
The Japanese firm also seeks to promote sales through HTF’s existing customer base, namely, local and foreign-affiliated manufacturers, besides meeting the growing demand of its Japanese customers through advancement and business expansion in India. It also plans to introduce new manufacturing technologies, such as continuous furnace, in addition to the existing licensing of technologies.
According to Dowa, the Indian heat treatment market will grow significantly in association with the expansion of automobile production. The company estimates its compound average growth rate to be around 12 per cent by 2015.