In order to expand its power electronics systems business in India, Fuji Electric Co., Ltd. has entered into an agreement with Peepul Capital Fund III LLC and the individual shareholders to acquire 100% of the shares of power electronics manufacturer Consul Neowatt Power Solutions Private Limited (CNPS) for Rs.720 crore.
Fuji Electric (FE) says that the company is globally developing its core business of Power Electronics Systems and India is one of the main focus areas for its global growth plan. FE launched Fuji Electric India Pvt. Ltd., a sales company, in 2009, and opened a low-voltage ac drives factory in 2016. That same year, FE also established an engineering company (Fuji Gemco Private Limited) as a joint venture with a local company. Since then, FE has been developing the industry solutions business primarily to improve productivity and save energy for the company's clients in India.
CNPS is a leading producer of UPS systems in India and is among the fastest growing power electronics company in India. The UPS maker has a strong customer base in India with a proven track record of supplying reliable power electronic solutions to customers across sectors including manufacturing, healthcare, social infrastructure, and other segments that require power quality solutions.
FE will expand its power electronics systems business in India, targeting the manufacturing industry and the data center market, which has been booming in recent years.
As part of its strategy in India, FE will leverage CNPS's network of sales and service centers across the country and will also uses the company's manufacturing infrastructure and product development capabilities to develop price-competitive products specifically for demanding site and power conditions.
Launch of Energy Solutions Business
While India is experiencing ongoing economic growth and expanding infrastructure construction, improvements in power quality are required for uninterrupted business operations. FE energy solution business will focus on improving the power quality and optimization of energy usage. It will do this by combining CNPS's UPS solutions with FE's energy management systems (EMSs). FE plans to propose such UPS solutions for data centers, social infrastructure, buildings, and factories, which require a stable and energy efficient power supply.
Strengthening the manufacturing system for local production and local consumption
Fuji Electric India and Fuji Gemco have factories in Mumbai (western India) and Faridabad (northern India), respectively. The acquisition of CNPS's factories (Pune in the western region and Chennai in the south) gives FE a large manufacturing presence in India.
FE will now be able to respond faster to customer needs in India with a more efficient production and distribution network by establishing the entire process of production and supply in India—from product development to material procurement, manufacturing, and quality assurance—of AC Drives, UPSs and other components.
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Overview of Company to be Acquired
In addition to producing UPS, CNPS offers development, manufacturing, engineering, sales, and service for servos, voltage stabilizers, active harmonic filters, off-grid solar inverters, and other customized power electronic solutions.
Fuji plans to call the combined firm in India, Fuji Consul Neowatt Power Solutions Private Limited. The transaction is expected to be completed by the end of August at the latest.
