Standard Engineering Technology Ltd. (SETL) will acquire a 19.19% stake in Japan-based GL Hakko Co. Ltd. for ₹70 crore through internal accruals, strengthening its presence in the global glass-lined process equipment market.
The company also has the option to raise its stake by another 31.88% over the next three years by investing ₹116.70 crore at the same per-share valuation. This will increase its holding in GL Hakko to 51.07%.
Expansion Plans
GL Hakko will utilise the proceeds to fund capital expenditure in glass-lined shell and tube heat exchangers, semiconductor-grade process equipment, clean rooms and manufacturing facilities.
Its new plant for glass-lined shell and tube heat exchangers at Nakatsu in Japan is scheduled to commence operations in 2026.
SETL and the AGI Group have already introduced the product category in India. The companies estimate the addressable market at about ₹2,000 crore in India and $2 billion globally.
Only specialist manufacturer
GL Hakko, founded in 1955, is Japan’s only specialist manufacturer of glass-lined process equipment.
The company has supplied more than 20,000 units to pharmaceutical, chemical and food processing plants from its manufacturing facility at Nakatsu in Oita Prefecture.
Technology Partnership
GL Hakko is a member of the AGI Group, SETL’s technology partner and its second-largest shareholder after the promoters.
The company said GL Hakko’s proprietary technologies and research and development capabilities would complement SETL’s manufacturing strengths and support its plans to build an international business in the glass-lined equipment segment.
Management comment
Standard Engineering Technology Managing Director Nageswara Rao Kandula said, “GL Hakko has been one of our most important partners for several years, and this investment is the logical next step in that relationship. It brings together SETL’s manufacturing scale and execution strength with GL Hakko’s proprietary glass-lining technologies and R&D.”
“Our shared ambition is to build a leading engineering solutions platform for the pharmaceutical and chemical industries,” he said.