Kobelco Steel ramps up output to meet increasing demand

Kobelco Steel ramps up output to meet increasing demand

Cold-rolled coil, a steel product supplied for car production in Thailand.
Cold-rolled coil, a steel product supplied for car production in Thailand.

Kobelco Millcon Steel Co (KMS), a joint venture between Thai and Japanese steelmakers, is increasing its supply of premium steel to 12,000 tonnes from 10,000 tonnes a month to meet growing domestic steel demand driven by the automotive industry.

"Car manufacturing mainly uses steel products such as cold-rolled coil and premium steel," said Theerayuth Lertsirarungsun, co-chief executive of KMS, who expects car production capacity to rise.

The Thai automotive industry experienced significant growth in April with car production increasing by 322% year-on-year to 104,355 units, according to the Federation of Thai Industries (FTI).

Domestic car sales increased by 93.1% year-on-year to 58,132 units while car exports increased by 160.16% year-on-year to 52,880 units.

The FTI attributed the increase to the recovery from sluggish car sales last year when lockdown was enforced.

According to KMS, global economic recovery fuelled by mass vaccinations in China and the US has played an important role in boosting steel consumption.

KMS aims to increase its production of premium steel to 15,000 tonnes a month within the next two to three years in order to supply products to Japanese automakers.

KMS is the first company in Asean to produce premium steel for all Japanese car companies in Thailand.

The company was formed by Japan's Kobe Steel Co and Millcon Steel Plc.

The company has factories in Rayong and Bangkok with a total capacity of 400,000 tonnes per year. They supply premium steel and high-quality wire rod steel to car and home appliance industries as well as new targeted industries under the Eastern Economic Corridor (EEC) scheme.

"KMS can increase its capacity to meet growing demand in the future. Our current capacity stands at 270,000 tonnes a year or around 67% of total capacity," said Mr Theerayuth.

FTI earlier set a target of 1.5 million car units produced in 2021, an increase of 5.12% from 1.41 million units last year.

About half of the new cars (750,000 units) will be exported.

However, the FTI's automotive club remains undecided on whether to adjust the production target due to the impact of the global semiconductor shortage and the third wave of the pandemic in Thailand.

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