Constellium and UACJ plan JV in US to produce Body-in-White aluminium sheet for the automotive industry
24 January 2014
Constellium N.V, a global aluminum products company formerly known as Alcan Engineered Products and headquartered in Amsterdam, and UACJ Corporation (UACJ), a Japan-based global aluminum manufacturer, are joining forces with a view to supply and market aluminum Body-in-White sheet to the North American automotive industry. To achieve this goal, Constellium and UACJ, through Tri-Arrows Aluminum Inc. (TAA), (UACJ’s subsidiary with Sumitomo Corporation and Itochu Group), intend to create a joint venture company in the United States, as an equal partnership, to serve the North American market.
The JV is expected to include a continuous heat treatment and conversion line with an initial target capacity of 100,000 metric tons supplied by cold rolled coils from both partners’ rolling mills. The planned facility is designed to allow for expansion beyond 100,000 tons. The total joint investment by both parties is expected to amount to approximately $150 million.
Current Corporate Average Fuel Economy (CAFE) regulations require significant reductions in fuel consumption by vehicles. The intrinsic lightness of aluminum makes it a prime material for the automotive industry to meet these improvements.
Automotive is a strategic market for Constellium and we believe this US initiative will strengthen the company’s position as a global leader. Both companies will approach this joint venture, in which Constellium will own 51% of the equity, as an equal partnership. Each partner has a crucial contribution to make through coil supply, customer relationships, and technical expertise.—Pierre Vareille, CEO of Constellium
Constellium estimates that the US market for Body-in-White aluminum rolled products could grow from less than 100,000 tons in 2012 to approximately 1 million tons in 2020, according to Laurent Musy, President of Constellium’s Packaging and Automotive Rolled Products business unit.
The goal of this joint venture is to support the ambitious lightweighting programs of the automotive manufacturers in the United States. Taking into account our joint expertise in Body-in-White production and strong relationships with key original equipment manufacturers in each market, we believe a joint venture between UACJ and Constellium is the optimal route to pursue this business opportunity.—Mitsuru Okada, CEO of UACJ
Constellium and UACJ are working toward signing a definitive agreement in the first half of 2014.
Constellium targets three strategic markets with its aluminum products: aerospace, automotive and packaging. Constellium generated €3.6 billion (US$4.9 billion) in revenue in 2012.
UACJ was established in October 2013 when Furukawa-Sky Aluminum and Sumitomo Light Metal Industries integrated their business operations. Together, their annual capacity for rolled sheet products exceeded 1 million tons, making them the largest such manufacturer in Japan and the third largest in the world.
Tri-Arrows Aluminum, Inc. was established in August 2011 when a Consortium of then-Sumitomo Light Metals Industries and Furukawa Sky Aluminum, in addition to Sumitomo Corporation and Itochu Group purchased the former ARCO Aluminum, Inc. TAA supplies and markets rolled aluminium can sheet to the North American container industry with annual production exceeding 325 thousand tons.
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