Nippon Light Metal and Kobe Steel will integrate their domestic aluminium extrusion businesses, aiming to sign a definitive agreement by November 2026 and establish a new entity by April 2027. The move seeks to enhance competitiveness through combined technical expertise and cost efficiencies.
This merger aims to strengthen the competitiveness of Japan's aluminium extrusion sector by combining the expertise and market reach of two major players, potentially leading to improved efficiency and cost savings in a challenging market.
Japan's Nippon Light Metal and Kobe Steel have announced plans to integrate their domestic aluminium extrusion businesses. The companies aim to finalize a definitive agreement by the end of November 2026, with the new integrated entity expected to commence operations in April 2027 or later.
Nippon Light Metal's aluminium unit involved in the merger has annual sales of approximately 30,000 tonnes, while Kobe Steel's Chofu Works unit sells about 28,000 tonnes per year. Nippon Light Metal supplies products to sectors including transport equipment, industrial machinery, and containers, while Kobe Steel focuses on automotive components, railway vehicles, and general distribution.
Kobe Steel had previously indicated weaker earnings in its aluminium extrusion business due to falling orders and was exploring collaborations to enhance long-term competitiveness. The planned integration is expected to combine Kobe Steel's alloy development capabilities with Nippon Light Metal's processing technology and extensive order base. The companies also intend to improve aluminium scrap collection, standardize capital investment, and reduce costs through their combined expertise.
The new entity will operate under a joint holding company structure, with Nippon Light Metal holding the majority stake. The integration will encompass Nikkeikin Aluminium Core Technology and related divisions of Nippon Light Metal, as well as Kobe Steel's aluminium extrusion, billet casting, and processed product businesses at its Chofu Works, along with domestic sales divisions.