Kobe Steel to Start Aluminium Plate Plant JV in Baotou, China

Kobe Steel announced on Wednesday the firm agreed with Chinese major aluminium re-roller, Jiangsu ALCHA Aluminium to establish a joint company in Baotou of Inner Mongolia, China and to construct an aluminium plate plant. The capex is estimated to total approximately 40 billion yen. Integrated production lines from melting to plate rolling will start operation in 2015. The JV’s cold rolling capacity is around 200,000 tonnes per year.

This is the first case that Japanese enterprise establishes an integrated aluminium plate plant in China. Kobe Steel and ALCHA carry out detailed feasibility study toward the final agreement expected in 1H 2012. The JV company will be established in January 2012 with capital fund at 2 billion yuan (approximately 24 billion yen). Kobe Steel controls 80% share and ALCHA has 20%.

ALCHA is Chinese major aluminium re-roller, established in Changshu, Jiangsu in 2002. The main products are aluminium foils, sheets and strips. The capital fund is 340 million yuan. Japanese major general trading house, Itochu Corporation holds 15% shares in ALCHA.

Kobe Steel explained aluminium plate demand in China is presently estimated at around 5 million tonnes per year while the demand is expected to reach 10 million tonnes ten years later. Major automakers of Japan, Europe and the U.S.A. have aggressively expanded local car productions in China and then aluminium plate consumption is increasing as a material for body panels. The demand is also growing as aluminium can material.

Kobe Steel plans to follow the demand allover China while the firm eyes export to Southeast Asia in future. The plant will install hot rolling facilities with annual output capacity at 400,000 tonnes for future output expansion.