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Kobe Steel's wire rod processing venture in China to expand capacity

November 15, 2011

Kobe Steel, Ltd. announces that it and partners have decided to expand the production capacity of their Chinese joint venture, Kobe Special Steel Wire Products (Pinghu) Co., Ltd. The other joint venture partners are Shinsho Corporation, Osaka Seiko Co., Ltd. and Meihoku Kogyo Co., Ltd.

Kobe Special Steel Wire Products (or KSP) began operations in 2009. Since that time, automobile production in China has continued to increase and consequently demand for cold heading (CH) steel wire has steadily grown. CH wire, made from special steel wire rod, is manufactured into high-strength nuts and bolts for use in automobiles.

Local procurement is anticipated to increase in the coming years, not only for CH steel wire, but also for bearing steel wire, for which demand is also rising. KSP's 710-million-yen capital investment will expand the production capacity of CH wire and enable the manufacture of bearing steel wire.

KSP plans to add two wire drawing machines to the existing three units, yielding a total of five machines. Wire drawing capacity will increase from the current 2,100 metric tons per month to 3,350 metric tons per month. An additional STC (Short Time Cycle) annealing furnace will also be installed for a total of two units.

To house the new equipment, a 3,100-square-meter building will be constructed and will house three cranes. The power source equipment will also be boosted. Start-up is anticipated to gradually begin in July 2012, as the installation of each piece of equipment is completed.

Expansion of Production Equipment

  Current capacity After capacity increase
Pickling equipment
Wire drawing machines
STC annealing furnaces
1 unit (6,000 tons/month)
3 units (2,100 tons/month)
2 units (1,500 tons/month)
No change
5 units (3,350 tons/month)
3 units (2,250 tons/month)

Profile of Kobe Special Steel Wire Products (Pinghu) Co, Ltd.

Chairman: Shinya Miyawaki (concurrently a senior officer at Kobe Steel)
President: Hiroyuki Tomiyama (dispatched from Kobe Steel)
Business: Manufacture and sale of CH steel wire and bearing steel wire
Location: Pinghu, Zhejiang Province, China
Capital: 1,485 million yen
Equity share: Kobe Steel 50%, Shinsho Corporation 30%, Osaka Seiko Co., Ltd. 10%, Meihoku Kogyo Co., Ltd. 10%
Employees: 58 (at end of June 2011)
Established: November 2007
Start-up: July 2009
Sales: 1,383 million yen (in 2010)