Kobe Steel Limited and 2 Japanese trading companies plan to establish JV manufacturing company in China to produce aluminum forgings for automotive suspensions. The project, an estimated USD 26.8 million investment is due to start production in August 2012 at Suzhou in Jiangsu Province.

The same partnership of Kobe Steel, Mitsui & Company Limited and Toyota Tsusho Corporation has been producing aluminum automotive forgings at Kobe Aluminum Automotive Products LLC in Bowling Green, KY, since 2005.

The new venture is provisionally called Kobe Aluminum Automotive Products Company Limited and will be capitalized at an estimated USD 10.7 million. Kobe Steel stated the operation will feature 300 tonnes mechanical forging press and heat treating equipment.

Kobe Steel said that the partnership will consider increasing production capacity of the new venture as market demand indicates. Kobe Steel will oversee production, quality control, and business operations. Mitsui and Toyota Tsusho will be responsible for sales and marketing to automotive manufacturers and parts makers in China.

Kobe Steel already supplies aluminum forgings to the Chinese auto industry from its Daian plant at Inabe, Japan. However, it explained that Chinese demand for automotive suspension parts is forecast to rise as its auto industry expands. Kobe indicated that together with its partners it considers domestic manufacturing to be essential to supplying the Chinese market.