Kobe to Expand Forging Capacity in China

Kobe Steel Ltd. is on track to start operations for its new Chinese aluminum forging operation this spring, and has outlined plans to increase capacity at that venture with a second construction phase at the same location. The new plan calls for raising the total investment in Kobe Aluminum Automotive Products (China) to $57.7 million, and to start commercial production with the new equipment in March 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.

No details of the forging equipment design has been made available. Kobe Steel indicated it expects that the new capital investment would allow its start-up venture to expand its marketing efforts to the automotive sector in China.

In its announcement, Kobe noted that Chinese automotive manufacturers continue to increase their production volumes, and that there is growing demand there for lighter vehicles to meet fuel-consumption regulations. These factors are boosting China’s domestic automotive sector’s demand for aluminum suspension systems faster than estimated in the venture’s original plan, and Kobe expects KAAP’s order levels to rise in line with that increase.

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 commercial 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 would 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 in early 2011 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 alloyed metals for aircraft engines and fuselages. Construction for that $244-million project is scheduled to be completed for production to start in mid- to late 2014.