JFE Steel to Launch Thai Auto-Grade Galvanizing Line in 2013

JFE Steel announced on Friday the firm builds continuous galvanizing line in Thailand for US$ 300 million to serve local automobile industry. The firm starts the Thai first automotive grade CGL with 400,000 tonnes of annual output capacity in April 2013. The firm tries to meet growing demand in volume and local procurement from Japanese transplants when the transplants increase the production. The firm tries to follow growing demand in Asia through the second CGL in Asia after Guangzhou JFE Steel Sheet in China.

The firm builds and operates the new plant through wholly owned subsidiary. The new plant is located in Hemaraj Eastern Seaboard Industrial Estate, Rayong of Thailand where many automakers have plants. The firm already got the land with 170,000 square meters staring construction soon.

The new plant provides high grade galvanizing steel to transplants of Toyota Motor, Nissan Motor and Isuzu Motor around there. The local CGL plant improves the delivery and quality service to the users by replacing most of the current supply from Japan.

The line focuses on automotive grade galvannealed steel with 0.4-2.3 millimeters thick and 800-1,880 mm width. JFE Steel supplies major part of the material cold rolled flat steel from Japan while the new plant eyes the purchase from Thai Cold Rolled Steel Sheet (TCR) in future.

JFE Steel established the subsidiary, JFE Steel Galvanizing (Thailand) with 500 million baht of capital in November 2008. The firm plans to increase the capital to build the new plant.

Thailand is largest automobile making country in Southeast Asia. The production will reach record 1.67 million units topping 1.39 million units in 2008, according to Federation of Thai Industries. The production is expected to increase to more than 2 million units in 2013. Japanese transplants represent around 90% of Thai automobile production. Ford Motor and Suzuki Motor plan to launch new plants in 2012.

JFE Steel exports around 1.5 million tonnes per year of steel to Thailand, which represents around half of Japanese steel export to the country. The firm studied potential project to meet growing demand for local procurement by the local users when the users increase the high grade steel consumption.