Kobe Steel’s wire rod processing venture in China to increase production capacity

TOKYO, February 24, 2016 — Kobe Steel, Ltd. and partners Sugita Wire, Ltd. and China’s Fasten Group have agreed to increase the production capacity of their Chinese joint venture that processes special steel wire rod into wire.

The joint venture, Jiangyin Sugita Fasten Spring Wire Co., Ltd. (also called JYSF), will install high-frequency induction tempering equipment and another wire drawing machine to produce oil-tempered wire at its plant in Jiangyin, Jiangsu Province. Plans call for mass production to commence in October 2016.

JYSF was established in 2005 to produce and sell oil-tempered wire for cold-coiled suspension springs. Full-scale operation began in 2007. JYSF has been providing a stable supply of this high-quality wire in China, where the automotive market is anticipated to grow over the medium to long term.

As the need for lighter automobiles increases due to stricter environmental regulations, demand for advanced oil-tempered wire for cold-coiled suspension springs is anticipated to expand in the future. The installation of induction tempering equipment will make possible rapid quenching and tempering to produce high-strength wire.

This capacity increase will strengthen Kobe Steel’s supply system for oil-tempered wire for cold-coiled suspension springs and will help capture the growing demand for this high-strength material in China.

Investment amount：

About 570 million yen

Details of investment：

Installation of high-frequency induction tempering equipment and one wire drawing machine; construction of product warehouse

Start of mass production：

October 2016

Current production capacity：

650 tons per month

Production capacity
after expansion：

1,070 tons per month (increase of 420 tons)

Name：

Jiangyin Sugita Fasten Spring Wire Co., Ltd.

Representatives：

Takashi Goto, Chairman (Senior Officer, Kobe Steel)
Takashi Inui, President (dispatched from Kobe Steel)

Business：

Production and sale of oil-tempered wire for automotive suspension springs

Location：

Jiangyin, Jiangsu Province, China

Capital：

760 million yen

Capital structure：

Kobe Steel 60%, Sugita Wire 25%, Fasten Group 15%

Employees：

60 (at the end of March 2015)

Established：

August 2005

Start-up：

March 2007

Sales：

72.6 million yuan (in 2014)

Location：

Tokyo, Japan

Representative：

Koichi Sugita, President and Representative Director

Established：

1915

Capital：

220 million yen

Sales：

16.5 billion yen

Employees：

359 (as of March 2015)

Location：

Jiangyin, Jiangsu Province, China

Representative：

Zhou Jiang

Established：

1964

Capital：

292 million yuan

Sales：

18 billion yuan (year ended December 2014)

Employees：

8,984 (as of March 2015)