Twin Disc is forming a majority-owned joint venture with Niigata Engineering Company, Ltd., of Tokyo, Japan. Twin Disc has had a long-standing and mutually successful relationship with Niigata Engineering. The new venture, named NICO Transmissions Co., Inc., will be an engineering and marketing company supporting Twin Disc's expanding global marine product line as well as a distribution company for NICO's family of transmission products
Twin Disc also
reported that it has sold its 25% ownership position in the Niigata Converter Company
to Niigata Engineering and, as a result, will realize a pre-tax gain in its fiscal third quarter ending March 31, 2001. A portion of the gain, estimated to be approximately $2.7 million, will capitalize the new venture. Niigata Converter is being merged into Niigata Engineering.
Twin Disc Chairman and Chief Executive Officer Michael E. Batten stated
: "We are pleased to be taking these steps with our Japanese associates, which will extend our already successful 48-year relationship into a new phase of cooperation. The terms of the joint venture agreement provide Twin Disc with exclusive distribution rights for NICO's marine transmissions up to 4,000 horsepower outside Japan
and the capability of rationalizing NICO's and Twin Disc's marine product lines in the future. Twin Disc also will represent NICO's remaining products on a global basis. Niigata Engineering will benefit from the efficiencies of consolidating Niigata Converter's manufacturing operations
. After a brief transitional period, we expect operations to commence on April 1."