TOKYO Oct 17 Japan's Kobe Steel Ltd is
teaming up with a local partner to build a plant in China
costing some 1.75 billion yuan ($287 million), aiming to meet
growing demand for automotive sheet steel.
Kobe Steel's decision to form a joint venture with China's
Angang Steel Co Ltd comes as the latest move in a
global expansion by Japanese steel makers aiming to increase
their presence in growing markets such as China, the world's top
Japan's top steel maker, Nippon Steel & Sumitomo Metal Corp
, said last month its joint venture with China's Baoshan
Iron & Steel Co Ltd will spend 1.1 billion yuan
($180.3 million) to boost output of automotive steel sheet to
grab a bigger slice of the market.
Kobe, Japan's No.3 steel maker, said the venture, Kobelco
Angang Auto Steel Co Ltd, will be capitalised at 700 million
yuan. The venture, 51 percent owned by Angang and 49 percent by
Kobe, plans to build a new line with an annual production
capacity of 600,000 metric tonnes at Angang's steel plant in
Anshan, Liaoning Province.
It aims to start producing cold-rolled high-strength steel
sheet in early 2016.
"China's car production is anticipated to increase by
roughly 50 percent to 30 million by 2020," Ikuhiro Yamaguchi,
executive vice president of Kobe Steel, told a news conference.
"Given government efforts to improve safety and
environmental standards for automobiles, demand for stronger,
lighter and more flexible steel sheet will likely grow rapidly,"
The joint venture aims to supply steel sheet not only to
Japanese automakers, but also European, American, South Korean
and Chinese makers, he added.
Japanese steel makers have also been accelerating expansion
elsewhere around the world. Nippon Steel began producing
automotive steel pipes in Mexico in May, followed by the start
of mass production of automotive steel pipes in India in June.
JFE Steel, a unit of JFE Holdings Inc, said in June
it would build a galvanizing line for automobiles in Indonesia.
($1 = 6.0995 Chinese yuan)
(Editing by David Holmes)