Kobe Steel has reported that the first phase of construction has been completed at the aluminum forging facility of Kobe Aluminum Automotive Products China (KAAP China), and added that commercial production has been started at this facility.
KAAP China, a joint venture between Kobe Steel, Toyota Tsusho and Mitsui, manufactures aluminum forgings for use in automotive suspensions in Suzhou, Jiangsu Province, China. At present, the company is involved in the second-phase expansion, which is slated for completion in March 2013. Once completed, the company is expected to have a two-fold increase in production capacity and will start upstream operations. The company is making an investment of roughly ¥7 billion for this expansion, of which the cost of first-phase construction was ¥2.5 billion and the remaining will be for the second-phase.
Besides the expected growth in the Chinese automobile production, the requirement for lighter vehicles is also increasing to fulfill stringent fuel consumption regulations. Hence, demand for aluminum suspensions is rapidly growing in the country, primarily from European, American and Japanese carmakers.
For this purpose, KAAP China has set up its heat treatment equipment and forging press. The company has been receiving orders due to growing demand and hence made a decision for capacity expansion in December 2011. In the second-phase investment, which is slated for completion in March 2013, additional heat treatment equipment and forging press as well as melting and casting operations will be added.
Kobe Steel fabricates aluminum forgings for use in automotive suspensions at its Daian Plant located in Mie Prefecture, Japan, and at its subsidiary, Kobe Aluminum Automotive Products situated in Bowling Green, Kentucky, the United States. The establishment of KAAP China has allowed Kobe Steel to set up a production network in the US, China and Japan. Through this network, Kobe Steel intends to fulfill the global demand of automakers for lighter cars.