Kobe Steel Ltd. now confirms it will establish a joint-venture firm to manufacture cold-headed wire products for the Mexican automotive market. The project was proposed earlier this year, with Shinsho Corporation as the major shareholder and three other partners.
Kobelco CH Wire Mexicana, S.A. de C.V. (KCHM), will be built at Silao, Guanajuato, a city in the central part of Mexico where General Motors and Volkswagen operate auto parts and auto assembly plants.
The investors anticipate increasing demand for high-quality auto parts from automakers and auto industry suppliers operating in Mexico, including Japanese auto parts producers.
CHQ products are rolled and formed by force through tools and dies (i.e., cold forged) to impart defined shapes, maintaining the mechanical qualities of the steel. Fasteners are among the most notable applications for CHQ products, including automotive quality fasteners.
The total capital investment for KCHM will be $41 million, Kobe Steel reported. It’s due to start up in 2015, with about 80 workers when operating at the full capacity of 40,000 metric tons/year.
Production processes will include wire drawing, pickling, and heat treatment. No equipment suppliers have been identified for the project.
Along with Shinsho (a distributor of iron and steel, nonferrous metals, and machinery and welding products that will claim a 40% stake in KCHM), Kobe Steel’s partners will be Metal One Corporation, a steel distributor, holding 25%; and Osaka Seiko Ltd., a producer of cold-forged parts), Grupo Simec, a carbon and specialty steelmaker, and O&k American Corporation, a producer of cold-forged steel wire.
The latter three partners and Kobe Steel will each hold a 10% share in KCHM.