Kobe Steel to Expand Wire Process Capacity in Zhejiang, China

Kobe Steel announced on Tuesday the firm agreed with joint venture partners to expand processing capacity to 1.5 times at Chinese special steel wire rod processing base of Kobe Special Steel Wire Products (Pinghu) (KSP) in Zhejiang for 710 million yen. KPS adds 2 wire drawing machines and a heat treating furnace to start operation in July 2012. The firm starts processing of bearing steel wire while the firm expands the existing operation of cold heading wire. The firm tries to meet growing demand for local procurement from automobile industry through the expansion. The firm targets monthly 1,000 tonnes of additional volume both for cold heading wire and bearing wire in fiscal 2015.

Kobe Steel agreed with Shinsho Corporation, Osaka based cold heading steel wire maker, Osaka Seiko and Gifu based cold heading wire maker, Meihoku Kogyo. KSP adds 2 drawing machines to increase the processing capacity from monthly 2,100 tonnes with 3 machines to 3,350 tonnes with 5 machines. The firm also adds a short time cycle annealing furnace for heat treatment to increase the treatment capacity from 1,500 tonnes with 2 furnaces to 2,250 tonnes with 3 furnaces.

One of the new drawing machines can process wire rod with maximum 30 millimeters diameter while current machines can process rod with max 20 mm diameter. The firm also expands the building by 3,100 square meters for the expansion while the firm increases the electricity supply and needed capacity. The pickling facility’s capacity is same at 6,000 tonnes per month.

KSP makes monthly 1,200-1,300 tonnes of cold heading wire for bolt and nut with high strength. Kobe Steel decided the expansion with expectation for higher demand for cold heading wire and bearing wire. Kobe Steel keeps providing high quality mother wire rod for KSP to support the competitiveness.

KSP started the operation in 2009 and normalized the operation under growing demand for automobile. Kobe Steel has 50% share in KSP with 30% share by Shinsho Corp., 10% share by Osaka Seiko and 10% share by Meihoku Kogyo. KSP posted 1.383 billion yen of sales in 2010.