Kobe Steel announced on Tuesday the firm builds new plant in Foshan, China for around 1.3 billion yen to make steel wire for high quality spring. The plant with monthly 600 tonnes of output capacity starts operation in first half of 2013. The first offshore wire making plant for engine valve spring and fourth Chinese wire processing plant for Kobe Steel. Kobe Steel shifts from export from Japan to local production to serve transplants of Japanese, US and European automakers. The firm tries to follow growing demand for high grade steel wire in world largest automotive market of China.
The new plant operating company, Kobelco Spring Wire (Foshan) is based in site of Kobe Wire Products (Foshan). Kobe Steel’s Chinese administration company, Kobelco (China) Holdings controls 100% of the new company with 650 million yen of capital. The new plant starts the operation at the line with wire drawing machine, oil tempering furnace, eddy current testing machine and shavelite machine supported by Amagasaki based processor, Shinko Wire and Kyoto based processor, Suncall Corporation. Kobe Steel shifts the monthly 200 tonnes of wire export from Shinko Wire and Suncall Corporation to the new company’s processing step by step. Kobe Steel eyes expansion of the new plant in 2-3 years of the start when the firm expects Chinese automobile production will increase from 18.42 million units in 2011. Kobe Steel has around 50% world share in wire rod for engine valve spring. The firm decided the local plant to improve quality and flexible operation to meet market situation when the demand of high strength spring increases for lighter vehicle and better fuel economy vehicle along with the more production in China. The new plant targets 25% share in engine valve spring wire for transplants of Japanese, US and European automakers by 2020.