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Our Bureau

Chennai , Feb. 22

MITSUBISHI Heavy Industries Ltd (MHI) of Japan will acquire the Chennai-based SRP Tools Ltd, a gear-cutting tool manufacturer.

With this, MHI will form a new company tentatively named Mitsubishi Heavy Industries India Precision Tools Ltd, according to a press release issued by MHI in Tokyo, which is available on its Web site.

When contacted, Mr S. Rm Pl Subramanian, Chairman and Managing Director, SRP Tools Ltd, declined to comment. According to the release, the new company will come into being on May 1 and will specialise in the production of precision cutting tools. It will initially produce gear-cutting tools and progressively expand its line-up to include high value-added products.

"Through steady business expansion, MHI targets annual sales to increase from SRP Tools' current figure roughly equivalent to 500 million yen (about Rs 21 crore) to 2 billion yen (about Rs 83 crore) in fiscal 2007 and 4 billion yen (about Rs 165 crore) in fiscal 2010," the release said.

The new company will be established at SRP Tools' present location in Ranipet, Tamil Nadu, about 120 km west of Chennai. The new operation will also oversee after-sale service bases throughout India with Voltas Ltd, the sole distributor of SRP Tools for the Indian market. The new company will have a capital base of about 71 million yen (about Rs 29 lakh) and will employ about 250 workers now engaged by SRP Tools.

The company will manufacture hobs, gear shaper cutters, gear shaving cutters and broaches. MHI aims to expand its business in machine tools, including gear-cutting machines, in all segments of the Indian market. SRP Tools and MHI have been in a technological cooperative relationship for a long time. The company's major customers are motorcycle and automobile manufacturers, including producers in Japan and South Korea.

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