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August 10, 2018

Volume 7 Issue 8

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Yushiro, QualiChem Form Partnership

Yushiro Chemical Industry Co. and American metalworking fluid supplier QualiChem Inc. announced an agreement Tuesday for Yushiro to acquire a stake in QualiChem and for the companies to help each other expand in different markets.

QualiChem officials confirmed that Yushiro received QualiChem stock, but declined to say how much.

Yushiro is the largest metalworking fluids supplier in the Asia-Pacific region and the fourth-largest globally. The company already has an established U.S. subsidiary—Yushiro Manufacturing America, Inc. which is located in Shelbyville, Indiana—but indicated a desire to expand its presence in the market.

“It’s just a good strategic alliance for us here and globally,” Yushiro Manufacturing America Vice President of Marketing and Business Development Jeffrey Mackey said in an interview. “[QualiChem] has a fully developed distribution network which is beneficial and of value to Yushiro.”

“[QualiChem’s] approach to the market has been innovation. The [metalworking fluids] industry had stagnated from a technology standpoint, and we stepped in and innovated and became one of the fastest-growing companies in the industry,” QualiChem Global Marketing Manager John Wiley told Lube Report.

The partnership will provide QualiChem with sales and distribution channels into the Asian, South American and Indian markets, Wiley said. The partnership will also help both companies expand on each other’s research and development efforts.

Both companies highlighted the lack of overlap among their respective customer bases. QualiChem’s sales are largely in North America, but it has no Japanese customers there. “One of the key aspects of this deal was how little overlap there will be between our businesses, which is uncharacteristic of partnerships in our industry,” Wiley explained.

“QualiChem does very little in the automotive market, there’s very little overlap and redundancy. We don’t really see them within our customer base,” echoed Mackey.

Yushiro Chemical Industry President and CEO Eiichi Ogo said the company will benefit from the use of QualiChem’s sales network in the U.S. QualiChem President Glenn Frank said his company will derive similar benefits in other markets.

“Yushiro’s extensive R&D capabilities and complementary sales channels will help us to better serve our existing customer base,” he said. “Additionally, Yushiro’s twelve manufacturing plants throughout Asia, North America and South America will provide immediate entry into new markets for our metalworking fluids and water treatment products.”

Frank and QualiChem Executive Vice President Dennis Butts will retain their current positions as part of the deal.

The Tokyo-based company’s largest market is the automotive industry, but it also supplies fluids to the aerospace, metals, mining, machinery, die cast, solar, electronics and glass industries.

QualiChem, which is based in Salem, Virginia, is a metalworking fluids and water treatment chemical developer and manufacturer. Its metalworking fluids segment makes up 80 percent of the company’s revenue and water treatment chemicals the other 20 percent.