Japanese electrical major Toshiba Corporation will buy electrical transformers and switch-gear maker Vijai Electricals for $200 m (Rs 1,280 crore). Toshiba will form a new company which will absorb the acquired business, integrate its design and manufacturing technologies for T&D systems and will expand into other products in power electronics systems and railway power supply systems.
Vijai was established in 1973, to manufacture and sell electricity distribution transformers. The business has grown on the strength of the company's high quality production capabilities, which have allowed it to win the top share in the Indian market and major footholds in both Europe and Africa. Vijai further expanded its T&D business in 2006, when it entered the power transformer and switchgear businesses, and through the business activities Vijai has manufactured and supplied the world's highest voltage class ultra-high voltage 1200 kV power transformer.
"The acquisition is necessary for our global T&D strategy, and Vijai's products and sales channel provide us with an ideal fit for our T&D business in India and beyond," said Takeshi Yokota, Corporate Vice President of Toshiba. "It will support us not only in the Indian market, where we aim to secure a 20% market share within five years, but in reinforcing our position in the global market, by strengthening our worldwide network."
Dasari Jai Ramesh, Vijai's Chairman added "I'm delighted to reach agreement with Toshiba, a global company. We are proud that our technology strengths and people capabilities will become part of Toshiba Group and will provide them a powerful platform for their business growth and market expansion."
India has recorded year-on-year GDP growth of over 5% since 2003, and long-term capital investment is expected to continue to counter current infrastructure shortages in key areas, including electricity and transportation. The T&D market size is expected to rise to over US$4 billion by 2015.