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Japan-Based Kobe Steel To Locate Aluminum Extrusion-Fabrication Plant In Bowling Green, Kentucky

05/10/2016
Kobe Steel Ltd., one of Japan’s leading metal producers, will locate an aluminum extrusion and fabrication facility next to a sister aluminum-forging plant in Bowling Green, Kentucky. The $46.7 million investment will create 105 jobs.

According to Governor Matt Bevin’s Office, Kobe will construct its new facility, Kobelco Aluminum Products & Extrusions Inc. (KPEX) near the existing Kobe Aluminum Automotive Products LLC (KAAP) plant on Central Avenue in the South Central Kentucky Industrial Park. Construction will begin in June with product fabrication operations expected to start by December 2017. Kobe executives anticipate the plant’s melting, casting and extrusion areas will begin production by October 2018.

The new facility will help capitalize on the automotive industry’s growing demand for aluminum products. Federal fuel-economy requirements and consumer preference for more efficient vehicles are driving that demand. Automakers use aluminum in bumper beams, suspension components, body framework and other areas to lighten vehicles, the Governor’s office explained.

“We’ve been supplying aluminum bumper materials to Japanese automakers since the 1990s, and now KPEX will enable us to provide our customers here with the same quality products to meet their requirements for lightweight components,” said Executive Vice President Akira Kaneko, who heads the Aluminum & Copper Business at Kobe Steel. “And through KPEX, we look forward to contributing to Bowling Green with capital investment, manufacturing growth and more jobs for people in the community,” he added.

As an incentive to encourage the investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved Kobe for up to $2.5 million in tax incentives through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets.

Additionally, KEDFA approved Kobe for up to $200,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing. Kobe can also receive resources from the Kentucky Skills Network.

"Kobe's decision to locate its first North American extrusion facility in Kentucky speaks volumes about its positive experience in the Commonwealth over the past 11 years," Governor Matt Bevin said. "This type of growth is why we put so much focus on building strong relationships and serving the needs of Kentucky's current corporate citizens. It is a true pleasure to welcome Kobe's latest facility to our state."

Founded in 1905 and headquartered in Kobe and Tokyo, Kobe Steel operates worldwide under the Kobelco brand. The company added aluminum and copper supply to its lineup in 1917. Through a number of corporate subsidiaries, Kobe now offers a diverse range of products and services including welding materials, industrial machinery, infrastructure and facility engineering services and construction equipment.

KAAP, the sister facility in Bowling Green, opened in 2005 and produces forged suspension components for cars and SUVs. The plant employs about 375 people. Last fall Kobe announced a $57 million expansion – KAAP’s sixth – that will add 112 jobs.

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