Steel-maker Kobe Steel Ltd. and its trading affiliate Shinsho Corp. said Monday they have agreed with three other companies to consider setting up a joint venture in Mexico to process steel wire rod into steel wire of cold heading quality used to make auto parts.
Under the agreement reached among the Kobe Steel group firms, Osaka Seiko Ltd. and Metal One Corp. of Japan, and Republic Steel of the United States, the five companies will discuss production equipment, location and other business plans for the joint venture with the aim of starting operations in mid-2015.
As auto production in Mexico nearly doubled to 2.93 million vehicles in 2013 from 1.5 million in 2009, the joint venture partners are anticipating solid growth in coming years. Japanese automakers have also moved into Mexico, creating increasing demand for auto parts materials, the Kobe Steel group firms said.