Kobe Steel May Invest $832 Million in New American Plant

Kobe Steel Ltd. — a company that is ironically known for providing aluminum to more than half of Japan’s auto industry– is now seriously considering building a $832 million plant on American soil. But why??

Well, as Japanese automakers have expanded sales and operations inside of America, a serious demand for more aluminum has opened up. Obviously, Kobe didn’t want another manufacturer to swoop in and take over their Japanese connection, so voila– welcome Kobe Steel to America… the land where American businesses ship out and foreign businesses ship in.

Amongst Kobe’s main motivators is Toyota Motor Corp. It is currently believed that the Japanese automaker will be switching to an aluminum formula for its North American vehicles, especially the high-selling Camry model.

Toyota’s impending switch has been largely driven by the United States adoption of stricter fuel economy standards and increased fuel efficiency competition from other automakers.

This move by Toyota has been huge when it comes to the direction of Kobe inside of the United States.

Kobe’s original plans to move inside of the U.S. were drawn up years ago. At the time, their investment ideas were much smaller. However, with the added pressure of building a plant that can and will process aluminum alloy, the company has found that the amount of money they would have to put in has skyrocketed.

In fact, the number has now gotten so high now, that the company has acknowledged that they will need to find companies outside of the auto industry that would be willing to by their aluminum.

Still, Kobe has every intention of continuing forward with the plan.

“We are considering every possibility from the beginning,” said a company leader in an interview with Bloomberg. “Our intention to gain access to the North American market hasn’t changed.”

This dedication is undoubtedly driven by the fact that the aluminum industry is set to explode during the upcoming years. In fact, Kobe’s research team believes that aluminum sheet sales for automotive body panels will jump to 1.7 million tons by 2024, which would more than ten times the total of last year’s 150,000 ton total.