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Kobe Steel's aluminum forging plant in China holds opening ceremony for start of integrated production

November 7, 2013

TOKYO, November 7, 2013 – Kobe Steel, Ltd. announces that its aluminum forging subsidiary in China held a ceremony yesterday to inaugurate the start of full-scale operation.

Kobe Aluminum Automotive Products (China) Co., Ltd. (or KAAP China) was established in September 2010 to produce and sell aluminum forgings for automotive suspensions in Suzhou, Jiangsu Province, China. With production beginning in August 2012, KAAP China embarked on a second-phase expansion, which now enables integrated production from melting to forging.

Around 80 people attended the event held onsite at the company, which is a joint venture of Kobe Steel, Mitsui & Co., Ltd. and Toyota Tsusho Corporation. Major attendees included:

• In China
  Zhou Xu Dong, Chairman, Administrative Committee of Suzhou National New & Hi-Tech Industrial Development Zone
• From Japan
  Tetsu Takahashi, Executive Vice President and Head of the Aluminum & Copper Business, Kobe Steel, Ltd.
  Tatsuo Yasunaga, Managing Officer and Chief Operating Officer of the Integrated Transportation Systems Business Unit, Mitsui & Co., Ltd.
  Hideki Kondo, Executive Officer and Deputy Chief Division Officer of the Metals Division, Toyota Tsusho Corporation

At the opening ceremony, Takahashi said: “KAAP China is placing its full efforts into building its business as a member of this wonderful development area in the Suzhou New District.” “By supplying parts that contribute to lighter cars, we are also contributing to environmental conservation,” he added.

Automobile manufacturing in China, the world's largest auto market, is forecast to increase greatly to approximately 30 million cars in 2022, from around 19 million units in 2012. In China, fuel efficiency regulations are becoming stricter due to worsening environmental problems brought about by exhaust gas emissions. The need to build lighter cars is accelerating among Japanese, American and European automakers. As a result, demand for aluminum suspensions in China is rapidly increasing.

Against this background, KAAP China started up its first line, which consists of a forging press and heat treatment equipment, in August 2012. With demand continuing to grow, the company decided in December 2011 to further expand production capacity. The second-phase investment included a melting furnace and casting line in the upstream operation, as well as an additional forging press and heat treatment equipment. The second line began mass production in April this year. KAAP China's integrated operations-consisting of a melting furnace, casting line, two forging presses, and two heat treatment lines-are currently in full-scale production. KAAP China now has a production capacity to make 250,000 pieces of aluminum forgings per month.

Kobe Steel produces aluminum forgings for automotive suspensions at its Daian Plant in Inabe, Mie Prefecture, Japan and at subsidiary Kobe Aluminum Automotive Products, LLC in Bowling Green, Kentucky, USA. The addition of KAAP China has enabled Kobe Steel to establish a production network in three locations: Japan, China and the United States.

In September, Kobe Steel unveiled plans to establish a company to manufacture aluminum sheet for automotive body panels in the Xiqing Economic-Technological Development Area in Tianjin, China, a first for a Japanese aluminum company. Plans call for start-up of operations in 2016.

Automotive lightweighting in the global car market is anticipated to accelerate as environmental regulations become stricter. By established a global supply network for automotive suspension parts and aluminum panel material, Kobe Steel's Aluminum & Copper Business aims to meet the need for lighter vehicles and become a leading company in the automotive aluminum field.

Profile of Kobe Aluminum Automotive Products (China) Co., Ltd.