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Kobe Steel to set up company in China to produce aluminum sheet for automobiles

September 30, 2013

TOKYO, September 30, 2013 — Kobe Steel, Ltd. announces that it will establish a company in the Xiqing Economic-Technological Development Area in Tianjin, China to produce aluminum sheet for automotive body panels. This decision was made at the board of directors meeting held earlier today.

The new company will be the first Japanese operation to produce aluminum sheet for body panels in China. Kobe Steel will supply master coils from its Moka Plant in Tochigi Prefecture, Japan. The aluminum will then undergo annealing followed by surface treatment and other finishing processes by the new company.

Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd., the new company, will be established in early 2014. It will have a production capacity of 100,000 metric tons per year. The wholly owned subsidiary of Kobe Steel will be capitalized at 450 million yuan (about 7.5 billion yen). Total investment is anticipated to reach 1.15 billion yuan (about 19 billion yen). The facility is expected to start up in 2016 and will employ about 140 people when it goes into full operation.

Ever since it began supplying aluminum sheet for automotive body panels to Japanese automakers in the 1980s, Kobe Steel has built up a strong supply performance history mainly in the Japanese market. Currently, Kobe Steel has gained over 50 percent of the Japanese market for aluminum automotive body panels. In addition to developing original alloys and production technologies, which include heat treatment, Kobe Steel provides technical solutions on shape design and forming suitable for aluminum applications. Kobe Steel has received high acclaim from not only Japanese automakers, but also European and U.S. automakers.

China is the world’s largest automobile market. In the next 10 years, automobile production is anticipated to increase by approximately 50 percent. Stricter fuel efficiency regulations in China aim to control the serious air pollution problem. As developing lighter automobiles is strongly required, demand for aluminum sheet is anticipated to increase tremendously in China in the coming years.

Kobe Steel currently supplies the Chinese market from its Moka Plant. However, automakers’ strong requests for a local source of automotive aluminum sheet led Kobe Steel to the decision to set up a production base in China.

Kobe Steel’s Aluminum & Copper Business is focusing on the automotive sector, which is increasing the use of aluminum to make lighter cars.

In June, Kobe Steel said it had entered into a technical cooperation agreement with Germany’s Hydro Aluminium Rolled Products GmbH for aluminum sheet technologies for automotive body panels. Following this, Kobe Steel’s plan to set up a base in China will strengthen its technical network for the growing demand for aluminum automotive body panels.

For aluminum forgings used in automotive suspensions, Kobe Steel formed Kobe Aluminum Automotive Products, LLC in the United States in May 2003. Kobe Steel subsequently formed Kobe Aluminum Automotive Products (China) Co., Ltd. in September 2010 to make the same products in China. Kobe Steel now has a production network covering three countries—Japan, the United States and China—for this product.

For extrusions and fabricated products, including bumper reinforcement parts, Kobe Steel and Sapa AB entered into a technical transfer agreement for Kobe Steel to supply Sapa with production technology for high-end aluminum extrusions. In this way, Kobe Steel is building a global supply network for its extrusions through Sapa’s worldwide locations.

Creating a global supply network for aluminum sheet for automotive body panels, Kobe Steel aims to become a leading company in the automotive aluminum field.

Outline of the New Company