Mitsubishi Heavy Industries Ltd (MHI) will become Nippon Yusoki Co Ltd's largest shareholder after buying 6.3 million new shares in the Kyoto-based company on June 8.

The acquisition will boost Mitsubishi Heavy's 7.7% stake in Nippon Yusoki to 20.1%, ahead of current top shareholder GS Yuasa Power Supply Ltd (11.6%). MHI will pay JPY4.2 billion (USD34.6 million) for its stake - JPY670 (USD5.51) per share.

MHI spokesman Hideo Ikuno attributes the purchase to a maturing global forklift market and rising Asian demand for forklifts.

Ikuno is also predicting further mergers and acquisitions and shake-ups in the global forklift industry.

"Under this circumstance, MHI and Nippon Yusoki have decided to strengthen their relationships to survive as winners in the market."

MHI and Nichiyu have been in co-operative relationships for more than 40 years, leveraging on each other's strengths. Nippon Yusoki, which manufactures Nichiyu-branded forklifts, is ranked number two in the Japanese electric forklift market while MHI is strong in the global market with its internal combustion (IC) forklifts, Ikuno says.

"[MHI and Nippon Yusoki] plan to jointly develop counterbalanced electric forklifts. Initially, the tie-up will focus on the enhancement of our domestic business," he says.

At present, MHI sells about 300 Nichiyu electric forklifts a year while Nippon Yusoki sells 300 MHI IC forklifts a year, a total turnover of JPY1.5 billion (USD12.3 million).

Nippon Yusoki became the first Japanese company to manufacture electric forklifts in 1939. Established in 1937, it claims to have produced the first conveyance robot and unmanned forklift system. Its forklifts are manufactured in Kyoto and Shiga, and Shanghai, China.

For the financial year ended March 31, 2007, Nippon Yusoki's net sales was JPY65.87 billion (USD542.2 million), an increase of 6.2% from the previous year. Operating profit totalled JPY3.11 billion (USD25.6 million), up 28.1 %from the year before. Overseas sales made up 12% of the total sales volume.