Posted in | Business | Iron and Steel

Shinko Wire and Suncall to Take Equity Stakes in Kobelco Spring Wire Company

Kobe Steel, Ltd. announces that Shinko Wire Company, Ltd. and Suncall Corporation will take equity stakes in its 100-percent owned steel wire company in China, Kobelco Spring Wire (Foshan) Co., Ltd. (or KSW).

The equity stakes will enable Kobe Wire and Suncall – two of the top-level companies in the industry in terms of manufacturing technology, production management and customer support – to participate in KSW’s business operation.

The two companies will bolster KSW’s manufacturing technology for the secondary processing of steel wire rod and strengthen the supply system for its product, high-quality steel wire.

Kobe Steel’s subsidiary Kobelco (China) Holding Co., Ltd. owned 100 percent of KSW when it was established in January 2012. When capital increase procedures are completed this month, Kobelco (China) Holding. will own 50 percent, Shinko Wire will hold 25%, and Suncall will have 25 percent of KSW.

KSW was established in Nanhai District, Foshan, Guangdong Province, China to manufacture and sell steel wire for high-quality springs. Start-up of production is scheduled for February next year.

The two new joint venture partners will contribute an additional 650 million yen to increase the capitalization of KSW to 1.3 billion yen, doubling the amount of the original 650 million yen invested by Kobelco (China) Holding. KSW, located next to the premises of sister company Kobe Wire Products (Foshan) Co., Ltd., will have a production capacity of 600 metric tons per month.

Automobile production in China is expected to increase over the medium- to long-term future. The world’s spring manufacturers have been actively adding production lines and increasing capacity to rapidly expand the production of engine valve springs and other high-quality springs. The production of high-quality springs requires the use of high-quality steel wire. As a result, demand for high-quality steel wire is growing.

Kobe Steel’s steel wire rod, the base material used in making high-quality steel wire, has received high acclaim from Japanese, U.S. and European automakers. The growing market in China led Kobe Steel to establish KSW.

With the participation of Shinko Wire and Suncall, Kobe Steel plans to build a strong supply system in China that can meet the market in terms of quality, competitiveness  and flexibility.  Through KSW, Kobe Steel aims to meet the growing demand for high-quality steel wire in China.

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