Shima Seiki Mfg., Ltd has acquired Osaka based bankrupt spinner of high quality cashmere yarns, Toyoboshi Kogyo Co., Ltd.

The deal which was approved by the Osaka District Court earlier this year, allows the manufacturer of high technology flat knitting machines to guarantee supplies of cashmere yarn to knitwear manufacturers in their domestic industry, some of whom use the company’s Wholegarment technology to produce high quality cashmere knitwear. Shima has established a wholly owned subsidiary called Toyoboshi Kogyo Co., Ltd

Toyoboshi Kogyo, one time owner of Scottish borders knitwear manufacturers Murray Allan of Innerleithen and Clan Douglas, started their operation in 1879 and became known as a cashmere spinner with a technological edge. Failure of mergers and acquisitions transactions in the 1990s and a slowdown in demand for the company’s cashmere yarns had an adverse effect on its results and cash flow and forced the company to file a petition for commencement of civil rehabilitation proceedings in December 2007.

Concerns in the domestic knitwear industry over the fate of the Toyoboshi Kogyo, and the affect its demise could have on stable supply of cashmere knitting yarn in Japan, lead to the company and other industry players approaching Shima Seiki Mfg. Ltd. The deal was concluded on the expectation that there would be a positive contribution to the domestic knitwear industry, which is currently promoting the manufacture of a wide variety of knitwear products with high added value in small quantities on a quick-response basis.

Toyoboshi Kogyo and its two subsidiaries Toyo Aqua Co., Ltd and Haruki Bouseki Co., Ltd, employ 45 people in the Osaka area. Assets related to the business to be transferred included real estate, movable estate, facilities, machinery and goodwill.