Jul 29, 2022
NGK SPARK PLUG CO.,LTD.
Announcement on the conclusion of a Letter of Intents on establishing the joint-venture company with IMC International Metalworking Companies B.V. for the Cutting Tools business
NGK SPARK PLUG CO., LTD. (President & Chief Operating Officer: Takeshi Kawai; HQ: Higashi-ku, Nagoya, NTK) is pleased to announce the conclusion of MOU with IMC International Metalworking Companies B.V. (“IMC”) to start discussion over capital and business alliance concerning our Cutting Tools businesses (the alliance). We are discussing to transfer our cutting tools business and assets in NTK to our consolidated subsidiary NTK CUTTING TOOLS Co., LTD (NTKCT) and thereafter reorganize the subsidiary’s capital structure so that IMC has equity interest 51% and NTK has 49% respectively, where IMC and NTK will be co-owners of NTKCT and able to operate the business.
In the “2030 Long-term Management Plan NITTOKU BX” which covers the period starting from April 2020, we aim to achieve business growth that exceeds the market growth rate.
We have been expanding our Cutting Tools business since when we first began the sales of ceramic tools in 1958, currently providing our customers around the globe with a broad lineup of products that contribute to high efficiency and high precision processing. Our aim towards the year 2030 is to significantly increase profitability by strengthening our technological abilities, cost competitiveness and sales capabilities.
Meanwhile, in the global market, general manufacturers that offer cutting tools in various shapes and material for a variety of applications are leveraging their economies of scale to expand sales and improve profitability. Under such a circumstance, we have been considering the collaboration with other companies to strengthen our product lineup and improve profitability to remain competitive and achieve further growth.
IMC is a global, and a full line supplier of cutting tools group with many outstanding companies handling various types of cutting tools, with advanced technological abilities and cost competitiveness, an extensive product lineup, and a global sales network.
Through the Alliance, IMC is expected to further expand the scale of its business by leveraging our technological abilities and product lineup. We, in turn, expect to reduce procurement by leveraging IMC’s economies of scale, enhance product lineup, streamline operations by sharing production systems and know-how, expand the coverage of customer needs and improve the speed of development, which enable us to deliver more valuable products to our customers globally.
IMC and we will proceed with discussions in good faith towards the final agreement on the alliance and we will make an announcement as soon as the detail of this JV establishment has been decided. We will disclose it in a timely manner in the process of examining concrete contents in the future if it would have a significant impact on business performance.
2.IMC company profile (as of March 31, 2022)
|(1) Company name||IMC International Metalworking Companies B.V.|
|(2) Location||Zwolleweg 6 2803 PS Gouda The Netherlands|
|(3) Representative||President and Chairman Jacob Harpaz|
|(4) Business description||Development, Production and Sales of cutting tools|
|(5) Main shareholders and shareholding ratio||Berkshire Hathaway Inc.：100.0%|
3.NTK Cutting Tools CO., LTD profile (as of March 31, 2022)
|(1) Company name||NTK CUTTING TOOLS CO., LTD|
|(2) Location||2808, Iwasaki, Komaki, Aichi 485-8510 (in Komaki Plant)|
|(3) Representative||Minoru Koide|
|(4) Business description||Production of cutting tools|
|(5) Date of Incorporation||December 21, 2020|
|(6) Main shareholders and shareholding ratio||NGK SPARK PLUG CO., LTD : 100.0%|
Location, Representative, Business description and shareholding ratio will be determined based on further discussion between IMC and NTK.