Kobe Steel, Ltd. announces that its U.S. joint venture, Kobe Aluminum Automotive Products, LLC (or KAAP), will expand its production facility to meet the growing demand in North America for aluminum forged suspension products. KAAP will invest approximately $56.6 million in capital investments. Start-up of the new production equipment is anticipated to begin in 2017.
KAAP will install an additional melting and casting line and two forging presses. The expansion will increase production capacity up to 750,000 pieces per month. The investment also includes the acquisition of adjacent land and the construction of an additional building to house the new equipment, while looking ahead to further potential expansion in the future. About 100 people are anticipated to be hired.
By making cars lighter, aluminum suspensions contribute to improving fuel efficiency. KAAP was established as a joint venture in 2003 by Kobe Steel, Mitsui & Co., Ltd. and Toyota Tsusho Corporation to produce aluminum forged suspension products in North America. Production began in 2005. Celebrating its 10th anniversary in May this year, KAAP has steadily expanded production to meet the rising demand for aluminum forged suspension products owing to the increasing need for lighter vehicles. With two melting and casting lines and six forging presses currently in operation, KAAP has the top market share for aluminum forged suspension products in North America.
In North America, the world's second-largest automobile market, car production is anticipated to continue growing. Estimated production of about 17.5 million cars in 2015 is projected to increase to 19 million cars in 2020. The need for lighter vehicles will accelerate as cars and light-duty trucks will be required to increase fuel efficiency to meet stronger Corporate Average Fuel Economy (or CAFE) standards.
Not to miss this opportunity, the new enlarged production facility will contribute to solidifying KAAP's top position in the aluminum forged suspension products market in North America.