OSG Invests in Somta Tools to become major stakeholder

In probably the most significant transaction in South Africa’s cutting tool history, OSG has acquired a majority stake holding in Africa’s largest manufacturer of round cutting tools – the 62 year old, Pietermaritzburg based company, Somta Tools.

OSG is regarded as a global leader in round cutting tools and is listed on the Tokyo stock exchange. Founded in 1938, the company had established an OSG group company presence on every continent with the exception of Africa. Now, with the investment in Somta Tools, OSG have a presence on every continent and strategically position themselves to better serve the African market.

The philosophy of the Japanese based company – to think globally, but act locally – has been key to its success in other markets, as this enables it to better serve its customers through face to face interactions with teams who understand the ‘local’ factors. In addition, these local initiatives are backed up by the immense engineering knowledge and skills that OSG have developed over nearly 80 years – providing unique solutions to almost every industry worldwide.

“What is particularly significant for Somta Tools in this venture is that not only will it be able to offer additional tooling solutions to the South African and African markets, and have access to OSG’s global sales networks to increase its export sales, but as an OSG group company it will have access to the most sophisticated cutting tool manufacturing technologies available today,” said Allan Connolly, MD of Somta Tools.

“What sets OSG apart from its competitors is that the company designs and builds 80% of all equipment used in its cutting tool manufacturing process – this gives it the ability to produce tools in a way that no other can. Somta will have access to these technologies that will enable it, over time, to improve its manufacturing capabilities, further enhance quality, increase productivity and ultimately provide increased value for its customers.”

In line with other foreign investment in the automotive sector in South Africa, this transaction between OSG and Somta will pave the way for increased local tooling solutions for this market segment, and ensure that it relies less on imported tooling. In time, this will lead to increased local skills and a growth in local manufacturing – which very importantly will play a small part in creating new and highly skilled jobs.

Another significant factor in this transaction is the fact that local government and business worked together to provide some incentives to attract this foreign investment – thus confirming government’s commitment to support manufacturing and create jobs.

Somta places a high priority on the importance of economic transformation and as part of its BBBEE initiatives, created a Somta Employees Trust some years ago that enabled the employees of Somta to own a part of the company. As a part of the transaction with OSG, the employees of Somta will receive a return for the sale of their shares and will continue to remain a part owner of the business in the new ownership structure.

Whilst OSG tooling has been available in South Africa for a number of years through its local distributor, this investment in Somta Tools marks a significant new initiative by OSG to better serve the South African and African markets, and no other foreign company has shown such commitment to the local cutting tool industry.

“This is a very exciting development not only for Somta Tools, but also for South Africa and all users of round cutting tools on the African continent. The company hopes that you will soon get to personally experience the value of this transaction,” said Connolly.

The new Somta Tool Wizard App
Somta Tools is also very excited be able to announce the launch of its new Somta Tool Wizard App that will enable end users to have all information regarding the best cutting tool and optimum cutting conditions at their fingertips.

The Somta App has three components to it – the first is the ability to select the right tool through the catalogue, the second allows the user to select the most appropriate tool through identifying the material and machining required, and the third is direct access to recommended cutting tool feeds and speeds if the user knows what Somta product code they are already using.

An additional App gives users the access to all Somta’s literature related to specific products and solutions. This App can be accessed through the main App for ease of use.

The development of the Somta App, in addition to a wide range of readily available inventory, is the next step in creating ease of use solutions for the end user.

The Somta App is available on the Android and Apple platforms, as well as through the Internet.

The Somta App will be very useful to anyone who is doing any type of machining and wants to ensure that they are using the optimum cutting feeds and speeds, or to anyone unsure of what is the right tool they should select for the job they are doing.

Machine Tools Africa 2017
Somta Tools are exhibiting at the Machine Tools Africa 2017 exhibition that takes place this year in May and will launch the new OSG partnership on their stand in Hall 6.

For further details contact Somta Tools on TEL: 011 390 8700 or visit www.somta.co.za