Kobe Steel, Anshan Steel to Consider Automotive Steel Sheet JV in China
09/28/2011 - Kobe Steel has signed a nonbinding letter of intent with China's Anshan Iron and Steel Group to explore a possible joint venture in China for the production of cold-rolled advanced high strength steel sheet for automobiles.
Kobe Steel, Ltd. has signed a nonbinding letter of intent with China's Anshan Iron and Steel Group Corp. to explore the possibility of establishing a joint venture in China for the production of cold-rolled advanced high strength steel sheet for automobiles.
Cold-rolled high strength steel generally has a tensile strength of 340 MPa or more. Advanced high strength steel, noted for its outstanding formability, has a tensile strength of 590 MPa or higher.
The two companies will now hold discussions on manufacturing equipment, production capacity, location, the role of each company in the project, and other aspects.
With many car manufacturers planning to increase production capacity in China — which became the world's largest automobile market in 2009 — Kobe Steel had decided to consider establishment of a local production base to supply automotive cold-rolled steel sheet. Automobile production exceeded 18 million units in 2010, and capacity is anticipated to rise to 30 million units by 2015 according to China's National Development and Reform Commission.
Kobe Steel in April 2010 launched its medium- to long-term business vision, KOBELCO VISION "G." Under this plan, the company is bolstering its high-end "Only One" products, technologies and services. The company is also further expanding business into growth regions, with the intention to increase overseas sales from 35.8% of total sales in fiscal 2010, ended March 2011, to 50% in the next five to ten years.
Kobe Steel and its partner United States Steel Corp. announced in December 2010 the construction of a continuous annealing line at their joint venture, PRO-TEC Coating Company. PRO-TEC will use the new line, which is currently under construction, to produce cold-rolled advanced high strength steel sheet for automobiles. The new line is scheduled to go into operation in 2013.
In 2008, Kobe Steel formed a technical alliance with Austria's voestalpine Krems and an umbrella agreement with India's Essar Steel Limited. These alliances are further enabling Kobe Steel to develop its business for automotive high strength steel in Japan, the United States, Europe and Asia.
Kobe Steel also is operating three production bases in China to process specialty steel wire rod. If a joint venture with Anshan Iron and Steel materializes, it will be Kobe Steel's first production base for steel sheet in China. The joint venture will enable Kobe Steel to supply its high strength steel sheet locally to meet the growing demand for lighter vehicles in China.
Kobe Steel is a leading Japanese manufacturer with businesses covering iron and steel, welding, aluminum and copper, machinery, natural resources and engineering, environmental solutions, construction equipment, and other businesses. In fiscal 2010, ended March 2011, Kobe Steel had consolidated sales of 1.86 trillion yen (US$22.35 billion) and employees of 34,772. Kobe Steel was founded in 1905 in Kobe.
Anshan Iron and Steel was established in 1948 in Anshan, Liaoning province, China. The company employs 134,000 people. Its business covers mining, steel, machinery, construction, transportation and engineering.
