Nordson Corporation (NDSN) has recently collaborated with Japanese stainless steel tank manufacturer Unicontrols Co., Ltd to expand its business operations in Japan. Through the strategic alliance, Nordson aims to improve its fluid-organizing systems and service quality in the country. However, the share prices have dropped momentarily to close at $69.73 as on Oct 10, 2014 as the long-term benefits are yet to sink in.
Ever since 1976, Unicontrols have been offering liquid and adhesive dispensing solutions on a global scale. Its manufacturing facilities are primarily based in Japan. The company provides a wide range of dispensing products, like liquid processing controls and hibar metering pumps for delivering high-precision dispensing. Similar to Nordson, Unicontrols offers its services in different types of industrial divisions.
Rationale for the Business Alliance
The business coalition with Unicontrols is expected to increase the market competency of Nordson. Management anticipates that the alliance will help improve the quality and expertise of the company’s product offerings. Furthermore, Nordson’s fluid dispensing system, combined with fluid reservoirs of Unicontrols, will help manufacturers regulate the usage volume of lubricants, adhesives or similar fluids.
Also, Nordson’s services will find application in different types of equipments like medical devices, automotive and specific electric appliances. The restricted fluid application will help augment the profitability of the companies through greater yields, lower manufacturing costs and improved features. Thus, the strategic alliance with Unicontrols is likely to improve Nordson Corporations’ brand value and revenue in the near future.
Since its inception in 1954, Nordson has witnessed significant global expansion. The company successfully caters to its global clientele by providing them with efficient precision technology solutions. The company designs, produces and trades qualitatively differentiated systems and products used for dispending coatings, polymers, biomaterials, adhesives and sealants. It also offers specialized services such as evaluation and curing of surfaces as well as fluid management. Nordson’s services are utilized in diversified industrial segments such as transportation, appliances, fishing, electronics, medical and energy.
Given its projected expansion plans, Nordson currently carries a Zacks Rank #2 (Buy). Other stocks in the industry that are worth considering include Barnes Grp. (B), Manitex Int Inc. (MNTX) and Middleby Corp. (MIDD), each holding the same rank as Nordson.
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