ISMT Ltd acquires 100% stake in Structo Hydraulics AB

ISMT Ltd on June 05, 2007 has announced that the Company through its subsidiaries and affiliates, has acquired a 100% stake in Structo Hydraulics AB ("Structo"), one of the largest and most well renowned manufacturer of tubular components for the hydraulic cylinder industry. These are downstream products made from seamless tubes manufactured by the Company.

Structo Hydraulics AB's factory is located at Storfors in Sweden and the Company has an extensive marketing network throughout Europe. The Company has an annual turnover of SEK 450 million (Rs 300 crores) and is an established supplier to many multinationals particularly those in the construction and agricultural equipment industry.

This acquisition brings the Company one step closer to its strategic objective of becoming the largest producer of Tubes and Tubular Components for Hydraulic Cylinders in Europe and Asia. In addition, it provides the Company quick access to the growing demand for Hydraulic Cylinder Tubes and Components within India and China. The two Companies have already chalked out a plan to expand manufacturing operations to India and subsequently to China in an effort to support Structo customers in those countries and in the neighbouring regions. Many of Structo's customers in Europe already have factories in India and China.

Structo's marketing network in Europe will also be utilized to market other the Company's products in Europe. Structo's market positioning in Europe will be strengthened as a result of access to a captive raw material base through the Company.

In the near term the Company expects that this acquisition will create a captive market of roughly 100,000 tonnes per annum of high value seamless tubes.

Following this acquisition the Company will be introducing Structo's product line in India thereby offering Indian customers a full range cold drawn tubes, Skived and Roller-burnished tubes and Components for Hydraulic Cylinders.

The Company's strategy is to provide customers in India, namely manufacturers of Hydraulic Cylinders, a line of value added products that reduces their manufacturing costs, improves their delivery times and thereby increases their throughput.

Source : Equity Bulls

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