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Joint venture for steel wire rod processing to be established in Mexico

September 3, 2014
Shinsho Corporation
Kobe Steel, Ltd.

TOKYO, September 3, 2014 — Shinsho Corporation and Kobe Steel, Ltd. have agreed with Metal One Corporation; Osaka Seiko Ltd; Mexico's Grupo Simec, S.A.B. de C.V.; and O&k American Corporation in the United States to establish a joint venture in Mexico to produce steel wire of cold heading (CH) quality.

Called Kobelco CH Wire Mexicana, S.A. de C.V. (or KCHM), the new joint venture will process steel wire rod into CH steel wire for sale to automotive parts manufacturers in Mexico. CH steel wire is used to make automotive fasteners and cold-forged products

KCHM will be headed by President Mitsufumi Konishi, who will come from Shinsho. The company will be established in the Santa Fe Industrial Park in Silao, state of Guanajuato, Mexico. Total investment is anticipated to reach approximately US$41 million (4.3 billion yen). KCHM will be capitalized at US$11.9 million (1.2 billion yen).

Shinsho is anticipated to hold 40 percent of KCHM; Metal One, 25 percent; Kobe Steel, 10 percent; Osaka Seiko, 10 percent; Simec, 10 percent, and O&k American, 5 percent.

The joint venture will employee about 80 people when it reaches full production. Operations are to start at the end of 2015. The new plant, with a production capacity of 40,000 tons per year, will have wire drawing machines, pickling equipment and heat treatment furnaces.

Mexico's auto production of 1.5 million cars in 2009 rose to 2.93 million units in 2013, and solid growth is anticipated in the coming years. Many Japanese auto parts manufacturers are setting up operations in Mexico. This is anticipated to create substantial demand for CH steel wire, as well as a growing need for a local source of this material. By producing in an area of increasing demand, KCHM will be able to quickly supply CH steel wire of outstanding surface quality and contribute to expanding the business of its customers.

Contact

General Affairs Department
Shinsho Corporation

Tokyo, Japan
TEL:+81-3-3276-2036

Publicity Group
Kobe Steel, Ltd.

Tokyo, Japan
TEL:+81-3-5739-6010

Company Profiles

Shinsho Corporation

Head office:
Osaka, Japan
President and CEO:
Ikuhiro Yamaguchi
Sales:
840.9 billion yen (year ended March 31, 2014)
Employees:
1,277 (at March 2014)
Business:
Trading of iron and steel, raw materials, nonferrous metals, machinery and welding products

Kobe Steel, Ltd.

Head office:
Kobe, Japan
President and CEO:
Hiroya Kawasaki
Sales:
1,824.6 billion yen (year ended March 31, 2014)
Employees:
About 36,000 (at March 2014)
Business:
Iron and steel, welding, aluminum and copper, machinery, engineering, construction machinery

Metal One Corporation

Head office:
Tokyo, Japan
President and CEO:
Iwao Toide
Sales:
2,563.3 billion yen (year ended March 31, 2014)
Employees:
About 10,000 (at March 2014)
Business:
Trading of steel products

Osaka Seiko Ltd

Head office:
Higashi-Osaka, Japan
President:
Hitoshi Sawada
Sales:
17.8 billion yen (year ended March 31, 2014)
Employees:
About 270 (at February 2014)
Business:
Production and sale of cold-forged steel wire, shaped steel wire and bar, and cold-forged parts

Grupo Simec, S.A.E. de C.V.

Head office:
Guadalajara, Mexico
Chief Executive Officer:
Luis Garcia Limon
Sales:
US$1.9 billion (year ended December 2013)
Employees:
About 5,000 (at December 2013)
Business:
Production and sale of special steel wire rod and bar
Note:
Parent company of Republic Steel

O&k American Corporation

Head office:
Chicago, USA
President:
Kazuta Oku
Business:
Production and sale of cold-forged steel wire and bearing steel wire