Constellium N.V. and UACJ Corp. plan to create a joint venture to make aluminum sheets for the North American automotive industry.
Constellium and UACJ, through UACJ’s Tri-Arrows Aluminum Inc., expect 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.
Corporate Average Fuel Economy regulations require significant reductions in fuel consumption by vehicles with a federal mandate of 54.5 miles per gallon by 2025. The intrinsic lightness of aluminum makes it a prime material for the automotive industry to meet these improvements.
“Automakers in the United States have already started to convert key models from steel to aluminum which we believe should translate into a significant increase in demand. We estimate that the U.S. market for aluminum rolled products could grow from less than 100,000 tons in 2012 to approximately 1 million tons in 2020,” says Laurent Musy, president of Constellium’s Packaging and Automotive Rolled Products business unit. “Constellium expects to benefit from this significant growth potential. UACJ is the ideal partner for us to serve U.S. customers with high-quality automotive sheets for applications like hoods, doors, roofs and structural parts of cars and trucks.”
Constellium will own 51% of the equity in the joint venture
“The goal of this joint venture is to support the ambitious lightweigting programs of the automotive manufacturers in the United States,” says Mitsuru Okada, CEO of UACJ.
“We believe that TAA, as the U.S. subsidiary of UACJ, will contribute significantly to the joint venture company through its stake in our rolling mill in Logan County, Kentucky,” says Patrick Franc, President and CEO of Tri-Arrows Aluminum. The companies hope to have a definitive agreement in place in the first half of this year. No location has been announced for the new facility.