Kobe Steel and Novelis Korea to establish joint venture

The joint venture will undertake production, with each parent company responsible for commercial relationships and sales. The joint venture will provide cold-rolled aluminum as a semi-finished product to Kobe Steel for use at two of its locations: the Moka Plant in Tochigi Prefecture, Japan and subsidiary Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd. in Tianjin, China. Kobe Steel will be able to receive up to half of the Ulsan Plant’s production capacity of approximately 300,000 tons per year.

In Japan, demand for can stock, one of Kobe Steel’s core products, is expected to remain firm. Demand for aluminum panel material is also anticipated to expand. To meet growing demand in Japan and China for these aluminum products, Kobe Steel had been considering how to secure stable supply capacity, an important issue.

Novelis is the world leader in aluminum rolled products, and the Ulsan Plant is one of Novelis’ major production locations in Asia. The joint venture will enable Novelis to increase operational efficiencies and boost the competitiveness of the facility.

Kobe Steel’s need to secure stable supply capacity in Asia complemented Novelis’ aim to better utilize its rolling assets, leading to the definitive agreement to turn the Ulsan Plant into a joint venture.

Under its fiscal 2016-2020 medium-term management plan, Kobe Steel is pursuing initiatives for weight savings in transportation. In April 2016, Kobe Steel established Kobelco Aluminum Products & Extrusions Inc. to manufacture and sell aluminum extrusions and fabricated products in the United States. In April this year, Kobe Steel decided to further expand production at Kobe Aluminum Automotive Products, LLC, a U.S. unit that manufactures and sells aluminum forged suspension products.

The joint venture with Novelis is in line with Kobe Steel’s growth strategy. Kobe Steel is continuing to enhance its current core businesses in can stock and disk materials, while strengthening its aluminum sheet business to meet the demand for aluminum panel material in the growing Asian market.

Kobe Steel, Ltd. is a diversified corporation with businesses in the three core areas of materials, machinery and electric power. The materials businesses include steel, welding, aluminum and copper. The machinery businesses consist of industrial machinery, construction machinery and engineering. Electric power supply is the third core business. Kobe Steel has head offices in Kobe and Tokyo, Japan. The Kobe Steel Group, consisting of Kobe Steel and its numerous subsidiaries and affiliates, has over 36,000 employees.