TOKYO - Kobe Steel, Ltd. and Toyota Tsusho Corporation have decided to consider establishing a joint venture to produce and sell aluminum sheet for automotive body panels and automotive heat exchangers in the United States. The two companies plan to conduct further studies with the aim of concluding an agreement for the joint venture by the end of September 2014.

The joint venture is envisaged to produce and sell mainly aluminum sheet for automotive body panels, along with aluminum sheet for automotive heat exchangers. Operations would start in 2017. In the joint venture scheme, Kobe Steel will be responsible for production, quality assurance and business operations. Toyota Tsusho will undertake the important role of marketing the products. The joint venture's equipment is anticipated to mainly cover downstream operations.

For the sourcing of the master coils to make the aluminum sheet, Kobe Steel is currently in talks with Wise Alloys, LLC. Wise Alloys, based in Muscle Shoals, Alabama, is a major U.S. producer of aluminum can stock for the beverage and food industries.

Corporate average fuel economy (CAFE) standards in the United States have become increasingly stricter in recent years. Cars will be required to achieve a 25-percent improvement in fuel efficiency by 2016, compared with 2011. By 2025, fuel efficiency will be required to double. On this background, automakers are rapidly taking steps to make lighter cars. One effective way is the increasing use of aluminum panel material. North American demand for aluminum body panels is anticipated to increase substantially from approximately 100,000 tons per year now to over 1 million tons in 2020.

Kobe Steel maintains more than a 50-percent share of the Japanese market for aluminum panel material. Since the 1980s, Kobe Steel has been providing total solutions covering materials development, analysis and design, and processing and joining technologies. Not only Japanese automakers, but American and European automakers as well hold Kobe Steel in high regard for its automotive aluminum products.

Utilizing this strength, Kobe Steel is accelerating its global expansion to meet the growing demand for aluminum panel material. In June 2013, Kobe Steel announced that it had entered into a technical cooperation agreement with Germany's Hydro Aluminium Rolled Products GmbH for aluminum sheet used in automotive body panels. In September 2013, Kobe Steel reached a decision to establish Kobelco Automotive Aluminum Rolled Products (China) Co., Ltd. to produce aluminum sheet for automotive body panels in Tianjin, China. Construction of the plant is underway with operations to begin in early 2016.

In addition, the manufacture and sale of aluminum sheet for heat exchangers by the joint venture is also under consideration.

By continuing to meet the global procurement needs of its customers, Kobe Steel is further strengthening its automotive aluminum business.

• [Editor:Phillip.Feng]