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Kobe Steel and Angang Steel sign joint venture agreement to make automotive cold-rolled high-strength steel in China

October 17, 2013

TOKYO, October 17, 2013 — Kobe Steel, Ltd. and China’s Angang Steel Company Limited, a leading subsidiary of Anshan Iron & Steel Group Complex, signed a joint venture agreement today in Anshan, Liaoning Province, to establish a joint venture in China to produce and sell advanced cold-rolled high-strength steel sheet for automobiles. The two companies had been conducting a joint study to explore the possibility of establishing a joint venture in China.

The new company, to be called Kobelco Angang Auto Steel Co., Ltd., will construct a continuous annealing line with a production capacity of 600,000 metric tons per year within Angang’s steelworks. Following incorporation procedures to establish the joint venture, plans call for production to begin in early 2016. Total investments are anticipated to reach 1.75 billion yuan (28.9 billion yen).

Kobelco Angang will be headquartered at Angang’s steelworks, Anshan Base, in Anshan, Liaoning Province. The continuous annealing line will make cold-rolled high-strength steel with a tensile strength of 590 MPa or higher. Angang will supply the joint venture with the substrate coils. The joint venture will employ about 100 people when it reaches full operation.

The new company will be capitalized at 700 million yuan (11.6 billion yen). Angang will own 51 percent of the venture. Kobe Steel plans to hold a 49 percent share through Kobelco (China) Holding Co., Ltd.

China is the world’s largest automobile market. Car production is anticipated to increase by roughly 50 percent over the next 10 years. Governmental guidance is strengthening safety standards and environmental considerations. High-strength steel offers higher stiffness while maintaining safety. Contributing to lighter auto bodies, high-strength steel improves fuel economy. As a result, demand for high strength steel is anticipated to increase considerably in the future.

Responding to these needs, the new company will combine Kobe Steel’s world-class automotive cold-rolled high-strength steel technology with Angang’s solid business base to meet demand for high-strength steel in China. By meeting demand for high-strength steel, the joint venture will also contribute to the economic development of China.

In the United States, Kobe Steel produces hot-dipped galvanized steel sheet through PRO-TEC Coating Company, a joint venture between Kobe Steel and United States Steel Corporation. In addition to its two production lines for hot-dipped galvanized steel sheet, PRO-TEC started up a new continuous annealing line in May this year. In Europe, Kobe Steel has a technical alliance with the voestalpine Group for automotive steel sheet. By having a production base for automotive cold-rolled high-strength steel in China, Kobe Steel will be able to further promote the global expansion of high-strength steel sheet, covering Japan, North America, Europe and China.

A basic policy of Kobe Steel’s medium- to long-term business vision, KOBELCO VISION “G”, is to expand into growth markets with its high-end “Only One” products. Kobe Steel has received high marks from its customers for its automotive cold-rolled high-strength steel sheet, a product in which it excels. The establishment of the new joint venture is clearly in line with these policies. Building a global network demanded by automakers, Kobe Steel is increasing its supply capabilities for high-strength steel sheet.

Outline of Kobe Steel, Ltd.

Outline of Angang Steel Company Limited

Notes to Editor

1. Angang Steel Company Limited is a subsidiary company of Anshan Iron & Steel Group Complex.
2. Cold-rolled high strength steel sheet is steel with a tensile strength of 340 MPa or higher. Steel with a tensile strength of 590 MPa or higher, which offers outstanding formability, is called advanced high strength steel (AHSS).
3. A continuous annealing line anneals cold-rolled steel sheet to give it outstanding formability.