Kobe Steel to Establish Joint Venture for Automotive Aluminum Panels Production in China

Kobe Steel, Ltd. has announced a formal agreement with Baowu Aluminum Technology Co., Ltd. (Baowu Aluminum) and Baoshan Iron & Steel Co., Ltd., both affiliated with China Baowu Steel Group, to create a joint venture. This venture will combine Kobe Steel’s wholly owned subsidiary, Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd., which produces aluminum panels in Tianjin, with Baowu Aluminum’s continuous heat treatment and finishing lines for aluminum panels. The agreement was signed at Kobe Steel’s Tokyo headquarters on August 8. The joint venture will proceed once it receives approval from the regulatory authorities in both countries.

Before finalizing this agreement, Kobe Steel and Baowu Aluminum conducted a detailed feasibility study on establishing a joint venture dedicated to the production and sale of aluminum panels. Announced on February 26, this initiative aims to expand the automotive aluminum panel sector and address the CO2 reduction requirements of automakers in China.

The joint venture will produce and sell aluminum panels for automotive manufacturers in China. To support its CO2 reduction goals, the company will focus on recycling scrap generated from its operations and those of its customers. With the growing demand for aluminum panels in China, the company is dedicated to reducing vehicle weight and contributing to a decarbonized society.

The joint venture company, tentatively named Kobelco Baosteel Automotive Aluminum Rolled Products Co., Ltd., will be equally owned by Kobe Steel, Ltd., through its China headquarters Kobelco (China) Holding Co., Ltd., and a joint entity comprising Baoshan Iron & Steel Co., Ltd. and Baowu Aluminum Technology Co., Ltd. The venture will be established with a capital of approximately 900 million yuan (about 18.0 billion yen) and will be registered in Shanghai, China. It will operate two manufacturing facilities, located in Sanmenxia in Henan Province and Tianjin.

The Kobe Steel Group, also known as the Kobelco Group, is dedicated to enhancing its approach to medium- to long-term priority issues by leveraging its unique strengths. This includes utilizing internal resources such as technologies, human capital, and expertise, alongside external assets like its extensive network of customers and business partners. The Group’s goal is to create a world where individuals, both now and in the future, can achieve their aspirations while leading safe, secure, and prosperous lives.

Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd., established in January 2014 with mass production commencing in April 2016, specializes in the manufacture and sale of aluminum panel materials for automobiles. Located in the Xiqing Economic and Technological Development Area in Tianjin, China, the company is wholly owned by Kobe Steel through Kobelco (China) Holding Co., Ltd., with a capital of 884 million yuan. The production facilities feature a continuous annealing line (CAL) and a surface treatment line, boasting an annual production capacity of around 100,000 tons. As of January 31, 2024, the company employs 245 staff members.