Kobe Steel’s Chinese JV to increase wire rod production capacity

By Simon Warburton | 18 December 2018

Kobe Steel and the other shareholders of Kobe Special Steel Wire Products have agreed to increase the production capacity of their Chinese joint venture.

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

Kobe Special Steel Wire Products (or KSP) was established in 2007 to supply steel cold heading (CH) steel wires to parts manufacturers. The wires are used to make automotive bolts, nuts and bearing products. Full-scale operation started in 2009.

Kobe Steel provides 100% of the special steel wire rods used by KSP so the same material available in Japan can be used to manufacture parts in China.

KSP has so far increased its production capacity four times. This fifth capacity expansion will help meet the growing needs of KSP's customers who anticipate a further increase in demand.

Around JPY900m (US$8m) will be invested to install three additional wire drawing machines, for a total of 11 and two more heating furnaces, bringing the total to eight. The new equipment is anticipated to start in March and June, 2020 respectively. Production capacity will increase to 5,500 metric tons per month.

Kobe Steel has positioned Japan, the ASEAN countries, North America and China as four major areas to process special steel wire rods for supply to parts manufacturers who have set up operations in the countries and regions.

To date, Kobe Steel has established two plants in Thailand for wire rod processing, one in the US, one in Mexico and four in China.