Japanese Steel a Fit in Mexico

Commentary by JP McDaris

In order to meet the growing level of auto manufacturing in Mexico, a group of (mostly) Japanese companies are contemplating the creation of a steel processing facility in the country, to launch as soon as the middle of next year.

According to a recent piece in American Machinist, Tokyo-based Kobe Steel is the key player of the five-company consortium of companies exploring the joint-venture steel processing facility in Mexico that would process steel wire rod into cold-heating quality (CHQ) steel, to supply automakers and their suppliers.

CHQ products are rolled and formed by force through dies, in high volumes, to impart defined shapes and high strength, maintaining the mechanical qualities of the steel. They are used in high volume to produce fasteners, such as automotive fasteners.

With a growing number of Japanese OEMs in Mexico, there is a greater need for CHQ steel wire in the region, for automotive fasteners and other cold-forged parts. Locally made CHQ components represent greater costs savings for the OEMs, as most of the existing suppliers of CHQ in the region import from the US and Japan.

The level of Japanese investment in the state of Guanajuato is high. Mazda, Toyota and Honda all have a presence here. Not surprisingly, the OEMs led the Japanese entrance into Mexico, then the tier one suppliers followed with growth and expansion continuing onward down the supply chain. That’s why I wouldn’t be surprised to see more announcements such as this steel consortium taking place, with the state of Guanajuato as ground zero for such development.

Source: American Machinist



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