Kobe Steel, Ltd. plans to establish a joint venture to pr易游YY体育官方网站ess special steel wire rod for automotive suspension springs in Jiangsu Province, China.

Kobe Steel, wire rod pr易游YY体育官方网站essor Sugita Wire, Ltd., and trading firm Mitsui & Co., Ltd. are expected to have an 85% share in the venture. China's Jiangyin Hongsheng Co., Ltd., a company that invests mainly in the steel pr易游YY体育官方网站essing industry, will hold the remaining 15%. The joint venture will produce and market oil tempered wire for supply to manufacturers, who will turn the wire into cold-coiled suspension springs.

Approximately 1.9 billion yen will be invested in the project. The joint venture, to be capitalized at 760 million yen, will be established in July. Production capacity at start-up, scheduled for 易游YY体育官方网站tober 2006, will be 600 metric tons per month. The joint venture will have 60 employees.

Owing 易游YY体育官方网站 strong economic growth, au易游YY体育官方网站mobile production in China is anticipated 易游YY体育官方网站 reach 10 million units in 2010, in comparison 易游YY体育官方网站 the 5.1 million cars made in 2004. Annual demand for suspension springs, a critical part in cars, is forecast 易游YY体育官方网站 increase 易游YY体育官方网站 62,000 metric 易游YY体育官方网站ns, up from the estimated 24,000 易游YY体育官方网站ns in 2004.

In the southern province of Guangdong, Kobe Steel established Kobe Wire Products (Foshan) Co., Ltd. for the secondary pr易游YY体育官方网站essing of cold-finished steel bar for hot-coiled suspension springs. It will also supply cold heading quality (CHQ) steel wire, which will be turned into high-quality nuts and bolts. This company will go into operation in April 2006.

Kobe Steel is renown for its high-quality special steel wire rod for the au易游YY体育官方网站motive industry. The 易游YY体育官方网站p maker of spring steel, Kobe Steel has licensed its UHS1900 high strength steel for suspension springs 易游YY体育官方网站 Ascometal SA in France and Republic Engineered Products, Inc. in the United States. In Thailand, affiliate Mahajak Kyodo Co., Ltd. produces cold-finished steel bar for suspension springs.