World Economy

Japan Co. to Buy 5 German Robotics Makers for $450m

Japan Co. to Buy 5 German Robotics Makers for $450mJapan Co. to Buy 5 German Robotics Makers for $450m

Nidec will spend roughly 50 billion yen ($450 million) to acquire five German robotics companies by the end of March, going after cutting-edge technology fueling the global shift toward automated manufacturing.

The Japanese motor manufacturer will kick off the shopping spree this month with the purchase of robot parts maker MS-Graessner, known for speed-reducing gearboxes key to moving the joints of robot arms. The deal is estimated at roughly 5 billion yen and will be made through subsidiary Nidec-Shimpo, Nikkei reported.

Nidec is also buying another company this month, as well as two more in January and one in March, spending up to 20 billion yen on each. The German companies, which make machine tools and robot parts, have already agreed to the deals in principle and are now ironing out the details.

Nidec plans to use these companies’ facilities to produce its own robot parts and expand sales to European robotics makers like ABB. While the German players sell mostly in Europe, they also supply manufacturers in Asia. Demand in the region is expected to rise, particularly as Beijing works to upgrade its industries under the “Made in China 2025” initiative.

The Kyoto-based company currently produces robot parts at four facilities in Japan, China and Southeast Asia, but expects its clients could move production of items bound for the US market elsewhere amid the growing trade war between Washington and Beijing.

Nidec has shifted its focus to fields going through rapid technological innovations like robotics, electric vehicles and energy-saving appliances. It has already bought 60 companies since it was founded in 1973, making it one of Japan’s most active acquirers.

According to the International Federation of Robotics, sales of industrial-use robots rose 31% to 387,000 units in 2017. Marketing research firm Fuji Keizai says the market for gearboxes will reach 190 billion yen in 2025, up 120% from 2017.

Nidec is facing stiff competition in the market for small precision gearboxes. Top-ranked Harmonic Drive Systems of Japan is boosting production capacity while Chinese producer Leader Precision Drive is gradually growing its market share.

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