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

July 24, 2014

TOKYO, July 24, 2014 - Kobe Steel, Ltd. and the other equity shareholders in Kobe Special Steel Wire Products (Pinghu) Co., Ltd. have agreed to expand the production capacity of their Chinese joint venture that processes special steel wire rod.

The other joint venture partners are Shinsho Corporation, Osaka Seiko Co., Ltd., Meihoku Kogyo Co., Ltd., Metal One Corporation and Kyodo Shaft Co., Ltd.

Kobe Special Steel Wire Products (or KSP) was established in 2007 to supply cold heading (CH) steel wire to parts manufacturers for use in making automotive bolts and nuts and bearing products. Full-scale operations began in 2009. Kobe Steel provides 100 percent of the special steel wire rod used by KSP, so that the same high-quality material available in Japan can be used to manufacture high-quality parts in China.

Automobile production in China continues to steadily increase, and KSP has become the largest supplier of CH wire to Japanese automotive parts manufacturers in China.

KSP increased its production capacity in 2012, but as the Chinese market is anticipated to continue growing in the future, KSP decided that it would be necessary to further increase capacity ahead of expanding demand.

KSP plans to add three wire drawing machines to the existing five units, yielding a total of eight machines. Production capacity will increase from the current 2,500 metric tons per month to 3,500 metric tons per month. Three more STC (Short Time Cycle) annealing furnaces will be installed for a total of six units.

A 6,400-square-meter building will be constructed to house the additional equipment. Start-up is anticipated to begin in July 2015.

The expanded production capacity and larger facilities will enable KSP to strengthen its supply capability in step with customer needs.

Capacity Expansion Plan

Investment amount:
About 1.8 billion yen
Details of investment:
Construction of new building (area of new building 6,400 sq. m., overhead crane, etc.
Installation of equipment (3 wire drawing machines, 3 STC annealing furnaces, etc.
July 2015

Expansion of Production Equipment

Current After capacity increase
Wire drawing machines 5 8
STC annealing furnaces 3 6

Current production capacity: 2,500 metric tons per month
Production capacity after expansion: 3,500 metric tons per month

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

Takashi Goto (concurrently a senior officer at Kobe Steel)
Kazuma Matsui (dispatched from Kobe Steel)
Manufacture and sale of CH steel wire and bearing steel wire
Pinghu, Zhejiang Province, China
1,775 million yen
Capital structure:
Kobe Steel, Ltd. 47%, Shinsho Corporation 25%, Osaka Seiko Co., Ltd. 10%, Meihoku Kogyo Co., Ltd. 10%, Metal One Corporation 5%, Kyodo Shaft Co., Ltd. 3%
106 (at end of April 2014)
November 2007
July 2009
3,202 million yen (in 2013)