Kobe Steel Ltd. will increase its aluminum forging capacity in China with a second construction phase at Kobe Aluminum Automotive Products (China.) The new plan will raise the total investment in the project to $57.7 million, and start commercial production in May 2013.
KAAP China was established in 2010 by Kobe Steel and two Japanese trading companies: Kobe holds a 60% stake; Mitsui & Co. Ltd. holds 25%, and Toyota Tsusho Corp. holds 15%. The initial investment was reported to be $26.8 million. Kobe said the new capital investment will allow KAAP China to expand its marketing effort in China.
In its announcement, Kobe noted that Chinese automotive manufacturers continue to increase production, and that there is growing demand for lighter vehicles to meet fuel-consumption regulations. These factors are boosting demand for aluminum suspensions in China faster than estimated originally, and Kobe expects KAAP’s order levels to rise, too.
It added that it will consider further expansion if Chinese demand continues to rise.
The plant at Suzhou, in Jiangsu Province, is due to begin production in August 2012, with a 6,300-metric ton forging press and heat-treating line producing parts for automotive suspensions. The second construction phase will add a second press of comparable size and another heat-treating line.
Along with these, KAAP China will add an aluminum melting furnace and billet casting line. Kobe stated that integrating production will improve the efficiency of the operation. No further details of the new equipment or the suppliers were provided.
The same partners operate Kobe Aluminum Automotive Products LLC in Bowling Green, KY. Kobe formed a different partnership earlier this year to build a new aerospace forging plant at Kurashiki in Southern Japan. That venture centers on a 50,000-metric ton press to forge large-scale components in titanium, nickel, and other specialty metals and alloys metals for aircraft engines and fuselages. Construction for that $244-million project is due to be complete in March 2012.