Osaki Electric Advances Production System Optimization for Smart Meters

Osaki Electric Industry Co., Ltd. is strategically transitioning its overseas smart meter business through a significant asset light initiative. The company has decided to transfer its fully owned manufacturing subsidiary, EDMI Electronics Sdn Bhd (EESB), to Cicor Asia Pte. Ltd., a subsidiary of Cicor Technologies Ltd., headquartered in Switzerland. This transition is aimed at enhancing the competitive edge and profitability of its smart meter operations.

Overview of the Initiative

The formal agreement for the transfer of EESB’s shares will be finalized on July 29, 2026, with the execution expected to take place by October 30, 2026. The transaction is valued at $7 million (approximately 1.085 billion yen at the assumed exchange rate of 1 USD = 155 yen). The production capabilities of EESB will subsequently be transferred under a manufacturing outsourcing agreement with Cicor, which is currently in preparation.

As a primary manufacturing base for Osaki Electric's products in Oceania, EESB accounts for a significant portion of EDMI's sales in that region, representing about half of the company's overall revenue in smart meters. Following the shift to an outsourced production framework, Cicor Asia will undertake the manufacturing of EDMI-branded smart meters. This will allow EDMI to redirect its management resources to core areas, including product development, software, edge intelligence, and grid solutions.

Despite the outsourcing, critical functions such as product design, intellectual property management, quality control, and customer interaction will continue to be managed by EDMI. The financial implications of this transition remain undisclosed at this stage, as they are subject to ongoing negotiations related to the ancillary agreements that will follow.

Rationale Behind the Decision

Osaki Electric has identified profitability improvement and the efficient use of capital as key management challenges for enhancing long-term corporate value. In the competitive landscape of the smart meter business, immediate action is deemed necessary to strengthen competitiveness and drive growth supported by next-generation smart meter market dynamics. Hence, optimizing production processes emerged as a vital strategy.

To materialize this optimal production system, outsourcing production functions to specialized partners like Cicor has been deemed most effective. Cicor’s experience in successfully collaborating with Osaki, specifically producing products for the UK market in Morocco, results in a partnership rich in proven quality, cost effectiveness, and production capabilities.

Objectives of the Initiative

This initiative signifies a shift from a traditional asset-heavy production model to an asset-light production approach. By consolidating production outsourcing, Osaki Electric anticipates reductions in costs along with several other financial benefits, including decreased capital investment burdens, lowered inventory levels, optimized working capital, and interest payment reductions. This strategic move aims to enhance capital efficiency through improved free cash flow.

The resources freed through these transformations will be reinvested into growth-oriented sectors, focusing on new product development, software enhancements, edge intelligence, and advanced grid solutions.

Management Comments

Roy Kirsopp, the Group CEO & Director of EDMI, stated, “This agreement allows us to concentrate even more on our strengths in smart meter technology and grid solution development. With Cicor providing robust and adequate manufacturing support, we can align our resources to focus on innovation and long-term value creation.”

Alexander Hagemann, Group CEO of Cicor, remarked, “Our collaboration with EDMI demonstrates how OEMs can achieve sustainable advantages by partnering strategically with Cicor. Simultaneously, it enables us to create a business that contributes positively to enhancing corporate value.”

Future Outlook

Osaki Electric is currently reviewing the projected consolidated performance for the fiscal year ending March 2027, which may impact the anticipated results related to this share transfer. Currently, no revisions are presented for the consolidated performance forecast as of the first quarterly report for the fiscal year ending March 2027.

Company Profiles

EDMI Electronics Sdn Bhd

- Location: Senai Industrial Park Phase III, Malaysia
- Established: October 5, 2010
- Business: Smart meter manufacturing and repair

Cicor Asia Pte. Ltd.

- Location: SGX Centre I, Singapore
- Established: August 24, 1999
- Business: Contract manufacturing and sales of electronic devices

EDMI Limited

- Location: Singapore
- Established: 1973
- Business: Design, development, manufacturing, and sales of smart meters and measurement systems

Osaki Electric Industry Co., Ltd.

- Location: Tokyo, Japan
- Established: January 1937
- Business: Development, manufacturing, and sales of electricity meters, distribution boards, monitoring and control devices, and smart lock systems.
- Listed on: Tokyo Stock Exchange, Prime Market (Stock Code: 6644)