Japanese specialty lubricant manufacturer Moresco Corp. expanded its die casting lubricant market and production capabilities with the acquisition of Michigan-based Cross Technologies Group for an estimated $8.8 million.
The acquisition by its subsidiary, Moresco USA, is expected to be completed on Oct. 20, the company said in a press release last week. Moresco USA will set up another subsidiary to take over the business of Cross Technologies.
“Moresco USA purchases raw materials for die casting lubricants and others from Cross Technologies Group (Cross),” Moreso said in the press release. “The acquisition will ensure a stable supply of products, enable the in-house production and innovation of raw materials for the manufacture and marketing of high-performance products.”
“The aim of the acquisition is to produce the main raw materials in-house, but we will use both in-house production and some outsourced production for the time-being,” a company spokesperson told Lube Report.
Apart from securing a new production base in the U.S, the acquisition will help Moresco expand its business in the U.S., China, Taiwan and India.
“We can expand our market share for die casting lubricants and acquire its die casting lubricant raw material business,” the spokesperson said.
Die casting is commonly used in the production of automobiles when molten metal is poured into a mold at high pressure and hardened. Die casting lubricants are used in production of aluminum automotive parts and magnesium parts to separate the heated metal from the mold. Moresco’s die casting lubricants are mainly sold under the Graphace and Astrolube brands.
Cross began operations in 1958 as a chemical manufacturer, supplying lubricants and cleaners to the metal forming industries. The company has businesses in Canada, Mexico, China, Taiwan, Vietnam, India, Singapore, Thailand and Malaysia and manufactures and markets die casting lubricants, metal working oils, and lubricants for the polyurethane and composite industries. It had sales of $7.8 million last year, along with ordinary income of $235,000. Moresco’s first quarter financial results for 2023 showed an 8% year-to-year increase in sales to ¥7.6 billion (about U.S.$52 million). Synthetic lubricant sales fell 40% due to lower investment in data centers, slowing demand for hard disk lubricants and a slowdown in demand for high-temperature lubricants. However, other segments, such as specialty lubricants, increased 8% due to increased production of automobiles in South and Southeast Asia and North America.