PARIS Jan 15 Aluminium products maker Constellium NV said it would invest up to 200 million euros ($273.8 million) to boost production capacity in Europe to meet growing demand in the auto sector for light-weight car parts.
Car manufacturers are stepping up the use of aluminium to help improve fuel efficiency and comply with tighter rules on vehicle emissions. The U.S. market for aluminium sheet in cars is expected to increase by five times this year.
Constellium's investment, to be spread over the next three years, would increase its annual capacity for aluminium sheet for car bodies in Europe to 100,000 tonnes from 40,000 tonnes currently, the Dutch-based company said on Wednesday.
In a first phase, the group will raise capacity at its Neuf-Brisach plant in eastern France and start sheet production for car bodies at its Singen plant in southern Germany.
It then plans to add a further production line in Europe, to be commissioned in the second half of 2016, it said.
A Constellium spokesman said it was too early to specify whether the expansion would create new jobs. The company, which also supplies products to the aerospace and packaging industries, employs about 1,400 workers at Neuf-Brisach and around 1,800 at Singen, he said.
While the European car market is expected to be stable this year, the premium segment, which is driving adoption of aluminium, is seen as performing well, particularly as German carmakers benefit from export demand.
Constellium Chief Executive Pierre Vareille said last week the company, whose roots lie in former French aluminium group Pechiney, would in the first quarter announce plans to enter the U.S. market to supply car manufacturers.