Constellium N.V. signed and MOU with its Japanese partner UACJ Corporation to expand their existing joint venture to produce automotive body-in-white (BIW) sheet in the U.S. Under the expanded joint venture, the companies contemplate a joint investment in two previously announced 100,000 tonne finishing lines, which would be funded 51% by Constellium and 49% by Tri-Arrows Aluminium Holdings, a U.S. affiliate of UACJ. This agreement to share investment costs in the finishing lines with UACJ enables Constellium to reduce its estimated capital requirement to approximately $340 million — compared to the $620 million previously announced in October 2015.
“We are delighted to strengthen our successful partnership with UACJ,” stated Pierre Vareille, CEO of Constellium. “We are fully committed to our BIW strategy and well placed to execute it. This agreement supports our strategic objective of expanding Constellium’s BIW industrial footprint in North America to serve our automotive customers while reducing the capital needed for this project. This partnership positions the joint venture as a leader in the fast expanding North American market.”
The Constellium and UACJ joint venture has already invested in a first finishing line located in Bowling Green, Kentucky, which will have a target capacity of 220 million lbs supplied by cold rolled coils from both partner’s rolling mills. The Bowling Green investment is expected to begin pre-qualification production mid-2016 and ramp-up in 2017 as planned.