Kobe Steel to Add Heat Treatment Furnace at Thai CH Wire Plant

Kobe Steel adds a heat treatment furnace at Kobe CH Wire (Thailand) to expand the production for automobile. The capacity will increase by around 30% for heat treatment and by around 20% for wire processing volume by January 2011 when Thai automobile production reaches record level. Kobe Steel tries to expand the production capacity to meet growing demand from transplants of Japanese automakers.

Thai automobile production is expected to reach 1.5-1.6 million units in 2010 from 1.39 million units in 2009 under stimulus package for environmental friendly vehicle. Kobe KCH Wire (Thailand) operates at monthly 3,000 tonnes for cold heading wire, which is used for bolt and nut, or 90% level of the peak in April-June 2008. The firm adds a furnace to total 4 heat treatment furnaces with around 2,800 tonnes of monthly capacity to meet growing demand for processed wire.

Kobe Steel group’s cold finished bar making plant, Mahajak Kyodo, which is located next of Kobe KCM Wire (Thailand), operates at monthly 1,500 tonnes level or 80-90% level of the peak. The cold finished bar plant also eyes expansion depending on the demand condition.

Kobe Steel’s wire and bar processing volume slightly decreases recently at Chinese 3 steel plants when automakers are in inventory adjustment. Kobe Steel expects the automobile demand will recover in later the year. The 3 plants have increased the production since the start of the operations with less impact by Lehman shock. The newest plant of Kobe Special Steel Wire Products (Pinghu) in Zhejiang reduces the operation to monthly 900 tonnes while the production reached 1,200 tonnes level. Kobe Steel expects the production will recover in September after automakers’ inventory adjustment.

Kobe Steel group’s Jiangyin Sugita Fasten Spring Wire in Jiangsu, which supplies mainly for local parts makers, reduces the production by 50 tonnes to monthly 550 tonnes level while Kobe Wire Products (Foshan) in Guangdong keeps high level operation at more than the capacity to ship 1,000 tonnes of cold finished bar for transplants of Japanese spring makers. Kobe Steel eyes second phase expansion at Jiangyin and Foshan with expectation for sustainable growth of Chinese automobile production after temporary adjustment.

Kobe Steel has 6 offshore wire processing plants including US cold heading wire maker, Grand Blanc Processing. Grand Blanc Processing also improves the operation rate to more than 80% of the peak when US automakers recover the production level. Kobe Steel tries to improve the supply ability mainly for transplants of Japanese automakers and parts makers through the supply network in major 4 markets including Japan, USA, China and Southeast Asia.

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