TOKYO—Sumitomo Rubber Industries Ltd. is divesting its wholly owned Swiss medical rubber subsidiary Lonstroff A.G. to NCM Investments VII.
SRI acquired Canton Aargau, Switzerland-based Lonstroff in 2015 and expanded the business in 2017 with the addition of Lonstroff Medical Elastomers (LSI) in Slovenia.
The sale to Dutch private equity fund NCM will include all operations, including the production facility in Slovenia, SRI said in a Dec. 21 announcement.
According to SRI, its local and European teams had worked together to improve productivity and quality at the company. Short-term profitability, however, was unlikely for the operation due to the impact of COVID-19, increased raw materials prices and delays in productivity improvement.
The divestment, it added, is also aligned with SRI's medium-term plan to 2025, which allocates a period for "selection and concentration of existing businesses."
For the future development of the group, SRI said, "we will continue to focus and utilize resources on growth businesses."
The divestment is expected to incur costs of about $80 million (Yen 11.7 billion) and is expected to be completed by the end of January.
Lonstroff produces and sells rubber parts for pharmaceuticals primary packaging as well as for other medical and pharma industry applications.
