Kobe Steel Completes Second-Phase Expansion of Aluminum Forging Plant at KAAP China Subsidiary

Kobe Steel, Ltd. <http://www.kobelco.co.jp/> announces that the second-phase expansion of the aluminum forging plant at subsidiary Kobe Aluminum Automotive Products (China) Co., Ltd. (or KAAP China) has been completed and the new equipment has begun mass production. Construction of the second-phase expansion began in December 2011.

A joint venture of Kobe Steel, Mitsui & Co., Ltd. and Toyota Tsusho Corporation, KAAP China produces and sells aluminum forgings for automotive suspensions in Suzhou, Jiangsu Province, China.

KAAP China has doubled the production capacity of its aluminum forgings to 250,000 pieces per month. The addition of a melting furnace and casting line has enabled KAAP China to establish an integrated production system that ranges from melting to forging. Total capital investment for the second-phase expansion totaled 4.5 billion yen.

Automobile manufacturing in China, the world’s largest auto market, is forecast to increase greatly to 28 million cars in 2022, from 19 million units in 2012. There is also a growing need for lighter vehicles to meet stricter fuel consumption regulations. As a result, demand for aluminum suspensions in China is rapidly increasing, mainly from Japanese, American and European carmakers.

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 anticipated to continue growing, the company decided in December 2011, when the first phase was still under construction, to further expand production capacity. The second-phase investment consisted of an additional forging press and heat treatment equipment. A melting furnace and casting line were also added, making possible the local production of aluminum billets and considerably improving cost competitiveness.

The world automobile market is anticipated to continue growing in the coming years. Kobe Aluminum Automotive Products, LLC in the United States is also expanding its production capacity. These investments will enable Kobe Steel to meet the rising global demand for aluminum suspensions.