Mori Seiki in Talks to Form China Joint Venture

Mori Seiki says that it is in talks with two international machining equipment makers, Gildemeister AG and Shenyang Machine Tool Co , to set up its first production base in China, this, accordingn to the Nikkei business daily reported. The three-way joint venture will manufacture compact tools used in making electronic and automotive parts.

Germany-based Gildemeister, Europe's biggest machine tool maker, will design and develop products for the venture, while China's Shenyang will build the production facility. Mori Seiki will handle sales and service.

Mori Seiki also states that it will raise its stake in Gildemeister to 20.1%. The two have been capital and business partners since March 2009. The company expects production to start by the end of the year, with an initial output of about 100 units a month.

The three companies will make an announcement soon, and the capital stakes and other details of the partnership will be worked out over the next two to three months. The venture will initially target the Chinese market and may tap other emerging economies, as well as Japan, the United States and Europe.