Tsubaki Nakashima Acquiring Chongqing Steel Ball

Tsubaki Nakashima Co. (Japan; TSE: 6477) announced plans to acquire Chongqing Steel Ball Company (China), one of that country's largest producers of bearing balls. Chongqing Steel Ball was founded in 1968 and privatized in 1998. The company reportedly employs approximately 300 people, producing in the neighborhood of one billion precision carbon steel bearing balls each month. Sales in 2005 are expected to reach USD $8.4 million, up 50% from 2004. Founded in 1934 as Toyo Steel Ball, Tsubaki Nakashima adopted its name after a 1996 merger with Nakashima Seisakusho. Since 1990, Tsubaki has been growing quickly, primarily by acquisition. In 1990, it acquired the steel ball division of Hoover Precision Products, headquartered in Cumming, Georgia, USA. In 1998, Tsubaki acquired the steel ball division of Daewoo MGM in Hungary, and in 1999 acquired Daewoo MGM's Roller Division, also in Hungary. In 2002, the company established Tsubaki Hoover (Taicang) Co. Ltd., Jiangsu Province, China, adjacent to Shanghai, its first ball plant in China. In 2003, the company acquired the ZET ball plant of Poland's FLT. The Taicang plant is already operating at capacity per local reports, and acquiring Chongqing is reportedly viewed as the best path to not only adding badly-needed capacity but also buys entree to key bearing component buyers in the Chinese market. In particular, Tsubaki Nakashima said, the qcquisition will allow it to meet fast-growing demand for bearing balls from Japanese auto and truck manufacturers locating plants in China. With Chongqing, Tsubaki Nakashima will be operating thirteen separate facilities in Japan; North America; Puebla, Mexico; Debrecen, Hungary; China; and Poland. Terms of the acquisition were not announced, other than it would be finalized in mid-December.