M&A has also helped companies gain competitive advantages by reducing costs and increasing profitability through synergies and economies of scale.
National Engineering Industries (NEI), part of $3 billion C K Birla group and manufacturer of NBC Brand of bearings, has managed to achieve these objectives through various global acquisitions made over the years. Selecting the right-fit overseas acquisitions has helped it increase its global connect with global auto original equipment (OEM) manufacturers. This has also helped NEI optimise its costs and discover new customers, which would not have otherwise been possible with India-only operations. It has also put NEI on the global map with international manufacturing footprints and the advantages of a more efficient supply chain to serve the company’s global customers.
For instance, NEI acquired Kinex Bearings & Global Supply in Europe in 2020 through NBC Global Ag, a wholly owned subsidiary in Switzerland established on June 28, 2017, to provide better services to customers in growing overseas markets.
The acquisition has helped the company enhance, diversify, and provide best-in-class products to its existing and potential customers, especially the Europe-based original equipment manufacturers (OEMs) in the auto industry and the railway sector.
In 2022, NBC Global Ag also opened its Global Technology Centre NBC Global (Germany) GmbH in Germany to support innovation, speed up implementation of latest ideas in response to customer and market requirements, and provide support to NEI’s global growth, technology prowess and function as an extended arm of NBC Bearings in India.
Targeting product diversification, NEI also opened a JV by the name NEI Amsted in April 2021. The JV, with installed capacity of two million seals per year, was a big step towards supporting the vision of self-reliant India to set up best-in-class manufacturing infrastructure in the country. Being a zero-discharge facility, it is committed to provide sustainable solutions for its stakeholders and the communities they operate in.
NBC Global AG also established NBC Kaili, (Ningbo) Precision Bearing Company, in Ningbo, China which helped NEI further expand its geographical global footprint.
According to Fortune Business Insights, the global ball bearing market was valued at US $ 19.08 billion in 2019 and is expected to grow to US$ 21.90 billion by 2027. The market is expected to increase at a steady rate of 2.1 percent throughout the projected period (2020- 2027). From US$ 39.46 billion in 2018, the global bearings market is predicted to reach US& 52.44 billion by 2026, representing a CAGR of 3.6 % over the forecast period.
