Japanese Water Giant LIXIL Invests in SA Manufacturing with Additional 49% GROHE Stake.
Japanese water, housing and urban development giant LIXIL has taken a 100% shareholding in Grohe Dawn Water Technology (GDWT), purchasing a 49% stake from Distribution and Warehousing Networks (Dawn).
Grohe Dawn Water Technology incorporates the GROHE, Cobra Water Technology, Isca, Vaal Sanitary Ware, Libra, Plexicor and Apex Valves brands, which manufacture a significant percentage of their products locally and export to various global markets.
Listed on the Tokyo Stock and Nagoya Stock Exchanges, the LIXIL Group ranks at 1,043 on the Forbes Top 2000 List of Largest Global Public Companies. It employs over 51 000 staff members worldwide and (as of May 2017) and has a market capitalisation of $7.7 Billion.
LIXIL’s additional investment in GDWT, valued at xxxx, is an important milestone for the South African manufacturing sector, which is struggling to attract Foreign Direct Investment (FDI) within the context of a sluggish economy and ongoing political uncertainty.
“LIXIL is a global leader in the provision of water solutions with significant expertise in the global market, so this is a very positive and exciting step forward for GROHE and South African manufacturing,” says xx xx, spokesperson. “The deal is also very positive for Southern African society, where sanitation and water supply are key social issues as well as market opportunities. LIXIL projects and research initiatives are heavily invested in both design and engineering of the highest standards, with a strong focus on water saving technology. Of particular importance to us is the passion LIXIL has for developing sanitation solutions that cater to the needs of communities, including vulnerable constituents such as women and children. ”
The LIXIL deal comes as a result of a decision, announced earlier in 2017, by major shareholder Dawn to sell its 49% stake in GDWT. GROHE is set to evolve to become a key part of the global LIXIL umbrella over the medium term, via an incorporation process that will feature sustained investments.
“There will be investments into developing various local manufacturing plants, as well as into the skills development of workers at the plants,” says xx. “Crucially, the further investment from LIXIL deal opens additional access for GROHE and its associated brands to major global resources, including leading technologies and training.”
The deal also creates access for Grohe to LIXIL’s significant global Research and Development processes, including product development and design.
“LIXIL is passionate about water in every sense,” adds xx. “The vision behind the transaction is to see our products in every household in Africa. There is a clear understanding of the potential of this region as in investment destination, and, crucially, this understanding is rooted in a recognition of the unique social development challenges that exist across Africa. LIXIL will work with Grohe to do positive business in this region by meeting those challenges.”