Posted on 28 May 2016
JFE Holdings is studying the idea of installing new processing lines for automotive steel sheet in Asia, President and CEO Eiji Hayashida revealed in an interview with The Nikkei.
Hayashida took a forward-looking stance on future investments in plant and equipment in the region, citing China and Thailand as possible sites for the lines.
While the overall market for steel is staging a tepid recovery at best, demand for high-value-added automotive sheet remains strong. JFE hopes to expand its share in this sector by enhancing its capacity to supply product in the Asian region.
As parent to JFE Steel, one of Japan's largest steelmakers, JFE has Chinese, Thai and Indian plants for processing sheet steel. It just set up a new Indonesian facility at the start of 2016.
Despite the economic slowdown in China, new-car sales remain firm, and the supply-demand balance is tight. Noting this, Hayashida said the time has come to begin feasibility studies on new lines.
JFE has a stake in a Vietnamese steelworks that begins operations this June. Shipping rolled steel products from there to the processing companies in Southeast Asia would be more cost-competitive than exports from Japan, Hayashida said.
With one eye on the anticipated demand for steel in Myanmar for civil infrastructure, JFE is eager to build a broad supply network in Southeast Asia.
