Yamatake Negotiating the Establishment of Joint Venture in Saudi Arabia to Expand Valve Business

Keywords: Control Valves, Process Automation, Factory Automation, Large-Bore, GCC.

Yamatake Corporation, a member of the azbil Group, announced that to extend its automation business in Saudi Arabia, it is negotiating the establishment of a joint venture with Tharawat Development Co. The JV company would manufacture and sell control valves, sell Yamatake's process automation and factory automation products, and provide engineering and related services. Agreement to begin formal negotiations was reached on January 31, 2012.

The new company under discussion would be founded by autumn of 2012 and would start the construction of its factory, with production to start in autumn of 2013. Production would begin with the assembly of large-bore control valves, and would expand to the lifecycle solution business in the future. In addition to product sales within Saudi Arabia, the export of products to neighboring countries is planned.

Tharawat Development Co., headquartered in Riyadh, deals in investment and business development in areas ranging from industry to real estate. Its previous investments include a petrochemical plant, and the company is well known among plant owners and plant-manufacturing engineering companies in Saudi Arabia.

The new company would be capitalized at 200 million Japanese yen, with Yamatake having a 51 percent investment share and Tharawat having a 49 percent share. Sales of 1 billion Japanese yen could be expected for 2014. The proactive hiring of Saudi nationals is under consideration with the goal of entrusting future operations to local employees. For that purpose, the training of key personnel is already underway in Japan. This JV will become the first manufacturing operation for Yamatake in Gulf Cooperation Council (GCC) countries.

ARC Advisory Group