Japanese steelmaker Kobe Steel has announced that, together with Japan-based Shinsho Corporation, it has reached an agreement with Japanese companies Metal One Corporation and Osaka Seiko Ltd, with Mexican firms Grupo Simec and S.A.B. de C.V., and with US-based O&K American Corporation to establish a joint venture in Mexico to produce steel wire of cold heading (CH) quality.
The new joint venture called Kobelco CH Wire Mexicana (KCHM) will process steel wire rod into CH steel wire for sale to automotive parts manufacturers in Mexico. CH steel wire is used to make automotive fasteners and cold-forged products.
According to Kobe Steel, total investment is anticipated to reach approximately $41 million. Operations are to start at the end of 2015, with an annual production capacity of 40,000 mt.
Mexico's auto production of 1.5 million cars in 2009 rose to 2.93 million units in 2013, and solid growth is anticipated in the coming years. Many Japanese auto parts manufacturers are setting up operations in Mexico. This is anticipated to create substantial demand for CH steel wire, as well as a growing need for a local source of this material. By producing in an area of increasing demand, KCHM will be able to quickly supply CH steel wire of outstanding surface quality and contribute to expanding the business of its customers.