STIC leads $30m Chinese casting investment

The investment will fund Yeong Guan Energy Technology Group’s machinery expansion as well as its new manufacturing facility in Li Yang City.

Seoul-based STIC Investments and MC Capital have invested $20 million and $10 million respectively for a roughly 30 percent stake in Yeong Guan Energy Technology Group (YGET), a casting components supplier.

MC Capital is the private equity arm of Mitsubishi Corporation, one of Japan’s largest general trading companies.

Founded in 1971, YGET supplies casting components to the wind power generator industry. It has operations in Taiwan, Ningbo, Nanjing and Dongguan.

The capital injection will be used to scale up YGET’s machinery and fund a new manufacturing facility in Li Yang City as well as other long-term projects across China.

YGET is less vulnerable to today’s changing markets as the company has diversified its casting product mix to injection moulding, steam turbines and wind generators to be more competitive, Kevin Lim, STIC’s chief executive officer, said in a statement.

STIC’s investment was made out of one of its mid-cap funds, the firm said. The investment also gives the firm a seat on YGET’s board.

In March, the South Korean Ministry of Knowledge Economy committed $20 million to STIC Asia Mid-market Private Equity Fund II. The fund is targeting $500 million. It will acquire substantial interest in mid-sized private sector companies in Korea and in other Asian companies related to Korea or are seeking to enter the Korean market.

MC Capital manages MC Capital Asia Pacific Private Equity Fund as well as the company’s corporate fund. As of this April, the firm has invested in more than 85 companies and achieved 26 initial public offerings.