Kobe Steel to Expand US Aluminium Forging Output

Kobe Steel announced on Monday the firm, Mitsui & Co. and Toyota Tsusho Corporation decided to add no.4 mechanical forging press machine at the joint venture for aluminium forging of automotive suspension, Kobe Aluminum Automotive Products (KAAP) for US$ 14 million. The joint venture increases the output capacity to monthly 280,000 units to meet higher demand after the start of the new machine. Kobe Steel controls 60% of KAAP with 25% share by Mitsui & Co. and 15% share by Toyota Tsusho. They established KAAP in 2003 to make aluminium forgings for automotive suspension in North America. KAAP started the commercial operation in June 2005. Automobile weight tends to increase for better safety in North America while automakers have to meet severer environmental regulations. Under the condition, aluminium forging suspension demand increases to reduce weight and improve the performance. KAAP increased the output capacity to monthly 190,000 units by the end of 2006 after the introduction of no.2 press machine in April 2006 and no.3 press machine in December 2006. However, the firm decided the additional expansion when the firm expects the capacity is short to the increasing order by first half of 2008. The firm tries to stabilize the operation with the 47% higher output. The firm increases the annual sales to 8.1 billion yen in 2008 from around 3.5 billion yen in 2006.