Japan-based JFE Shoji Trade announced that it has agreed to establish a joint venture company with Productos Laminados de Monterrey, S.a. de C.V. (Prolamsa), a leading steel pipe manufacturer in Mexico, and Japanese company Sankin Corporation, a manufacturer of cold drawn steel tube, for manufacturing and sales of cold drawn tube, especially focusing on automobile use.
Upon conclusion of the joint venture agreement, the new company will be established in Monterrey, Mexico, near Prolamsa's main plant. In Mexico, neighboring the United States, the investments by Western and Japanese automobile and its related businesses are rapidly increasing, being backed up by an extensive free trade agreement network and relatively competitive labor costs.
According to JFE Shoji Trade, in the auto parts industry, demand for higher quality cold drawn steel tube has been increasing, urging the shift to local purchasing. The company is expected to capture such demand of not only Japanese customers, but also of American and European customers as well.