By Cameron Chai
Kobe Steel has collaborated with Jiangsu ALCHA Aluminium, a key Chinese producer of aluminum rolled products in China, in order to expand its Chinese aluminum business. ALCHA and Kobe Steel have decided to form a joint venture in Baotou, Inner Mongolia to manufacture and market sheet and aluminum coil. After completion of a comprehensive feasibility study, both the companies will be signing the final contract in the spring of 2012.
The joint venture will be formed by January 2013 and ALCHA will have 20% stake while Kobe Steel will have 80% at an investment of around 40 billion yen. The company will manufacture and market sheet and aluminum coil for beverage cans and automobiles. The production capacity will be 200,000 t each year. The company name has not been decided yet but it is estimated that the operation will need a capital of 2 billion RMB. The plant will be functional by the year, 2015.
The demand for aluminum sheet in China has been growing rapidly in the last few years. U.S., Japanese and European customers have advanced their way into the Chinese market. It is estimated that aluminum sheet demand for automobiles and beverage cans will increase considerably in the next few years. Only a specific number of Chinese manufacturers can fabricate these products as there is a need for sophisticated production technology. In order to meet these demands, ALCHA and Kobe Steel will develop the market especially for can stock and automotive aluminum sheet.
It will be possible to obtain the same superior quality of aluminum sheet available in Japan in a combined operation, which includes casting, melting, cold and hot rolling.
In the cold and hot rolling stages, the joint venture will install advanced equipment to obtain the world’s largest aluminum coils.
Additionally, Baotou in Inner Mongolia, where the facility will be built, is at close proximity to a large amount of energy resources and has a good workforce. These factors will enable the joint venture to be highly competitive.