Japan Companies Mull Steel Wire Rod Processing Plant in Mexico

Kobe Steel, Ltd., trading affiliate Shinsho Corporation and three other firms have signed a memorandum of understanding to consider establishing a joint venture in Mexico to process steel wire rod into steel wire of cold heading quality (CHQ). The other companies are Metal One Corporation and Osaka Seiko Ltd, both of Japan, and Republic Steel of the United States.

The five companies will discuss and consider business plans for a joint venture aimed at starting operations in mid-2015. Under discussion is the joint venture's production equipment, location, number of employees, timing for the establishment of the venture, and other issues.

Auto production in Mexico reached 2.93 million units in 2013, nearly double the 1.5 million cars made in 2009, and solid growth is anticipated in the coming years. One after another, Japanese auto parts manufacturers are setting up operations in Mexico. This is creating increasing demand for CHQ steel wire, which is used to make automotive fasteners and other cold-forged parts.

Demand in Mexico for CHQ steel wire has so far been met mainly by exports from the United States and Japan. Anticipating growing demand, the five companies aim to set up a production and sales unit in Mexico that can quickly supply high-quality steel wire to their customers.　（source: KOBELCO）