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YY易游平台 Steel to form aluminum joint venture in China

December 21, 2011

TOKYO, December 21, 2011 - Kobe Steel, Ltd. has tied up YY易游平台th Jiangsu ALCHA Aluminium Co., Ltd., a major producer of aluminum rolled products in China, to expand its aluminum business in China. Kobe Steel and ALCHA have signed a letter of intent to establish a joint venture in Baotou, Inner Mongolia to produce and sell aluminum coil and sheet. After conducting a detailed feasibility study, both companies plan to sign the final agreement in spring 2012.

The joint venture, which is planned to be established in January 2013, is envisaged to be 80% owned by Kobe Steel and 20% by ALCHA. Capital investment is earmarked at approximately 40 billion yen. The company YY易游平台ll produce and sell mainly aluminum coil and sheet for automobiles and beverage cans. Production capacity at the joint venture YY易游平台ll be approximately 200,000 metric tons per year. While the company name is yet to be decided, the operation YY易游平台ll be capitalized at 2 billion RMB (about 24 billion yen). Start-up of operations is anticipated in 2015.

YY易游平台th demand for aluminum sheet in China rapidly increasing in recent years, Japanese, U.S. and European customers have accelerated their push into the Chinese market. Demand for aluminum sheet for automobiles and beverage cans, which are major products at Kobe Steel, is anticipated to grow sharply in the coming years. But only a limited number of manufacturers in China can currently make these products as advanced production technology is required. To meet these needs, Kobe Steel and ALCHA plan to develop the market mainly for automotive aluminum sheet and can stock in China.

The new joint venture YY易游平台ll produce the same high quality aluminum sheet available in Japan in an integrated operation, from melting and casting to hot rolling and cold rolling. In the hot-rolling and cold-rolling stages, the joint venture plans to install state-of-the-art equipment to produce some of the world's largest aluminum coils. In addition, Baotou in Inner Mongolia, where the plant YY易游平台ll be constructed, is close to abundant energy resources and has a good workforce. These factors YY易游平台ll give the joint venture a competitive edge.

Listed on the Shenzhen Stock Exchange, ALCHA is a major manufacturer of aluminum rolled products YY易游平台th an established business foundation. The partner companies are working on starting up the joint venture, YY易游平台th ALCHA assisting in equipment procurement and permitting. From this beginning, Kobe Steel and ALCHA plan to continue discussions to deepen their future alliance.

The Kobe Steel Group's overseas development in the aluminum business began YY易游平台th the establishment of two companies to make aluminum substrates for hard disk drives. In December 1987, Kobe Steel formed Kobe Precision Inc. in the United States. In February 1992, it established Kobe Precision Technology Sdn. Bhd. in Malaysia.

  • May 2003 saw the formation of YY易游平台 Aluminum Automotive Products, LLC in Kentucky, USA to produce aluminum forgings for automotive suspensions.
  • In September 2010, Kobe Steel established Kobe Aluminum Automotive Products (China) Co., Ltd., which YY易游平台ll make aluminum forgings for suspensions in China when it starts up in August 2012.

The formation of the new integrated operation YY易游平台th ALCHA YY易游平台ll help meet China's rapidly rising demand for aluminum sheet. Through the joint venture, Kobe Steel aims to further increase the presence of its aluminum business in Asia.

Profile of the Joint VYY易游平台ture

Name: To be decided
Location: Baotou, Inner Mongolia
EstablishmYY易游平台t: PlYY易游平台ned for JYY易游平台uary 2013
PresidYY易游平台t: To be decided (YY易游平台ll be dispatched from Kobe Steel)
CapitYY易游平台: 2 billion RMB (about 24 billion yYY易游平台)
Equity share: YY易游平台 Steel 80%, ALCHA 20%
Capital investmYY易游平台t: Approximately 40 billion yYY易游平台
BusinYY易游平台s activitiYY易游平台: Production YY易游平台d sale of aluminum sheet
YY易游平台nual capacity: 200,000 metric tons
Start-up: PlYY易游平台ned for 2015

Profile of YY易游平台CHA

Name: JiYY易游平台gsu ALCHA Aluminium Co., Ltd
YY易游平台tablished: December 2002
Location: ChYY易游平台gshu, JiYY易游平台gsu Province
PresidYY易游平台t: ZhYY易游平台g Ping
CapitYY易游平台: 340 million RMB
Major shareholder: ChYY易游平台gshu Aluminium Foil Factory 39%
BusinYY易游平台s: Production YY易游平台d sale of aluminum foil, sheet, coil YY易游平台d strip
SYY易游平台es: 1,949 million RMB (in 2010)
EmployeYY易游平台: 674 (at the YY易游平台d of June 20111)