Kobe Steel to build aluminum extrusion and fabrication plant in Kentucky, USA

May 9, 2016

TOKYO, May 9, 2016 — Kobe Steel, Ltd. announces that it will manufacture and sell aluminum extrusions for the automotive sector in the United States. The new business will operate through a company called Kobelco Aluminum Products & Extrusions Inc. (or KPEX) in Bowling Green, Kentucky.

KPEX will make bumper materials for cars and car frame materials. The new company will have an integrated production facility, with operations ranging from melting to fabrication. Plans call for construction of the plant to begin this summer. Fabrication will start in the latter half of 2017, and the melting to extrusion processes will begin in the latter half of 2018. Total investment is expected to reach $46.7 million, and KPEX is anticipated to create 110 jobs.

North America is the world's second largest automotive market and car production is forecast to continue to grow in the future. In addition, higher Corporate Average Fuel Economy (CAFE) standards for 2025 are accelerating the need to lighten car bodies. As aluminum extrusions are an effective way to reduce the weight of cars, demand for bumper beams, car frame materials and other extruded products is expected to greatly expand.

Kobe Steel has been supplying aluminum bumper materials to Japanese automakers since the 1990s. The company has over 20 years of experience in the Japanese market and has established a strong track record. Kobe Steel's original weight-saving proposals covering both product development, such as for high-strength 7000 series aluminum alloys, and cross-section design technology have received high acclaim from customers.

The establishment of KPEX will enable Kobe Steel to manufacture and supply the same high-quality aluminum extrusions and fabricated products available in Japan in the North American market. Through innovative weight-saving proposals, Kobe Steel aims to gain the trust of automakers in North America. KPEX will also contribute to strengthening Kobe Steel's overall supply network, which covers Japan and the United States.

KPEX will be Kobe Steel's second manufacturing operation in Bowling Green after Kobe Aluminum Automotive Products, LLC (or KAAP), which began production in 2005. KAAP makes aluminum forgings for automotive suspension systems and aluminum cast rods for compressors.

Outline of the New Company

Company name:
Kobelco Aluminum Products & Extrusions Inc.
President:
To be decided
Date of establishment:
April 21, 2016
Location:
Bowling Green, Kentucky, USA (to be located near KAAP)
Capital:
$24 million
Equity share:
100% by Kobe Steel (through Kobe Steel USA Holding Inc.)
Total investment:
$46.7 million
Employees:
110 (in 2019)
Main equipment:
1 melting and casting line, 1 extrusion press, 2 bumper fabrication lines
Production capacity:
About 500 tons per month

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