TOKYO, May 10 (Reuters) - Kobe Steel Ltd said on Wednesday it will spend about 55 billion yen ($484 million) to expand its aluminium business, buying 50 percent of a plant in South Korea and building a new facility in Japan, to meet growing demand from car makers.
Japanese aluminium producers such as UACJ Corp and Kobe Steel are stepping up global expansion plans to snare market share as automakers turn to the light metal to meet stricter environmental rules.
Under an agreement with Novelis - wholly owned by Indian aluminium producer Hindalco Industries Ltd - Kobe Steel will pay $315 million to take a 50 percent stake in Novelis’ existing aluminium plant in Ulsan, South Korea.
The plant has an annual capacity of 300,000 tonnes of cold-rolled aluminium, and Kobe Steel will take half of those semi-finished products, which it will send to factories in Japan and China for final processing and to sell on to auto parts makers.
Novelis and Kobe Steel plan to close the deal in September.
Kobe Steel will also spend 20 billion yen to build additional production lines at its Moka aluminium plant, north of Tokyo, to make auto panel materials. The new lines will add 100,000 tonnes a year to Moka’s production capacity.
Kobe estimates Japanese domestic demand for aluminium panel materials will grow to more than 300,000 tonnes a year by 2025, up from 40,000 tonnes a year now, a spokesman said.
China’s demand will rise to 300,000 tonnes a year by 2025 from the current 50,000 tonnes, he said.
$1 = 113.7400 yen Reporting by Yuka Obayashi; Editing by Tom Hogue