Kobe Steel Ltd. and its partners plan to expand their U.S. joint venture, Kobe Aluminum Automotive Products LLC, for the fourth time in the ten years since it started operating at Bowling Green, KY. They cited growing demand for forged aluminum automotive suspension parts as the impetus for the new project, budgeted at approximately $56.6 million and scheduled to start operation in 2017.
About 100 new employees are forecast to follow the expansion.
The new project’s goal is to add a new aluminum melting and billet casting line (the third at KAAP) plus two new forging presses, for a total of eight producing lightweight automotive suspension components.
Cars and light trucks designed for greater fuel efficiency and to meet rising fuel-economy standards are increasing the demand for lighter component parts and systems, like aluminum suspensions. Kobe Steel noted that domestic automotive vehicle production is estimated to rise from 17.5 million cars in 2015 to 19 million cars in 2020.
The KAAP expansion will involve adding a new building on a site adjacent to the current plant. That property has been acquired and included as part of the investment cost. Kobe Steel noted the additional property holds potential for future expansion.
KAAP is a joint venture of Kobe Steel, Mitsui & Co. Ltd., and Toyota Tsusho Corporation. It supplies forged aluminum suspension parts to domestic and transplant automakers across North America at a current rate of 540,000 finished parts/month, and the expansion will expand its already leading position in that market segment.
The same investors have a joint venture in China forging aluminum automotive suspension parts at a rate of 250,000 finished forged parts/month. Also, Kobe Steel forges similar products at its Daian Plant in Japan at a rate of 330,000 parts/month – giving it a total production capacity of 1.12 million parts per month.
The announced expansion project for KAAP in Kentucky will bring production volume there up to 750,000 pieces per month. With that increase, the global enterprise would have a projected capacity of 1.33 million pieces/month.