UACJ Corp., Japan’s largest aluminum rolling company, announced plans to invest a total of ¥55 billion (~US$482 million) to enhance production capacity at its plants in the U.S. and Thailand.
U.S. Expansion
UACJ will invest US$175 million in Logan Aluminum in Russellville, Kentucky, a joint venture run by Tri-Arrows Aluminum (a UACJ subsidiary) and Novelis Corp. The expansion will support growth in that UACJ has seen in both the automotive and can stock markets.
UACJ expects the market for can stock (one of the company’s mainstay products) to expand in tandem with economic growth and population increases. “In this business environment, it is important for manufacturers of rolled aluminum to establish a position that enables stable global supply in order to win out in international competition,” explained the company in a press release.
In addition, the market in the U.S. for automotive aluminum materials has shown substantial increases in demand, due to increasingly stringent automotive fuel efficiency regulations. In response to these changes, the Logan mill began manufacturing automotive materials in 2015. In order to continue to improve its position in the manufacture of sheet for automotive panels without reducing their supplies of can stock, the company believes it is essential to invest to further enhance its production capacity.
The expansion location has not yet been determined, but will most likely be connected with the Logan Mill. The US$175 million investment will include melting equipment for scrap material and a casting line to be installed by July 2018 and a cold rolling mill to be completed by April 2019. This will lift Logan’s capacity from the current 320,000 tpy to 400,000 tons (including both can stock and automotive sheet material).
Thailand Expansion
UACJ Corp. is investing ¥37 billion (~US$330 million) to at its UACJ (Thailand) Rayong Works in Thailand. As with the Logan Mill, the Rayong Works serve the can stock and automotive markets. The company expects the demand for can stock to be particularly strong in Asia due to rapid expansion. Furthermore, demand for heat exchanger materials for automotive is growing, as well as demand for panel materials in North America, which the company expects to ripple out into the Asian market.
Phase 1 operations of the Rayong Works commenced in January 2014, with capabilities from cold rolling to finishing to downstream processes. In August 2015, construction was completed on casting and hot rolling capabilities. At which point, fully integrated manufacturing began with the aim of ramping up the production systems to deliver 200,000 tons per year by 2017. To date, the company has primarily provided high-quality products, such as beverage can stock and automotive heat exchanger materials, for the Asian market. In October 2016, the Rayong Works achieved a monthly production capacity of 10,000 tons.
“We are building a solid manufacturing base with three axes, in Japan, the United States, and Thailand, as we believe a stable global supply is essential,” explained the company. “In order to maximize the Rayong Works’ excellent location, meet the demand to provide additional products at high quality and low cost, and win out in international competition, we have decided that the current capital investment is essential to bolster production capacity and improve profitability.”
The new investment at Rayong Works will include an expansion of the plant’s casting line (scrap melting furnace and casting equipment) as well as the installation of a new cold rolling mill, scalper, surface treatment and coating line, slitter. New buildings will be constructed to house the expanded operations. Commissioning of all of the facilities is expected to be completed in June 2019, bringing the plant’s rated annual capacity to 320,000 tons from the current 200,000 tons.