Kobe Steel, Ltd. and Novelis Korea Limited, a wholly owned subsidiary of Novelis Inc., have entered into a definitive agreement to establish a joint venture in South Korea that will produce aluminium sheet products.

Kobe Steel plans to acquire 50 percent of the Ulsan Plant of Novelis Korea, for US$315 million (about 35 billion yen). The joint venture, to be named Ulsan Aluminum, Ltd., is anticipated to be established at the end of September 2017, when the deal is expected to close.

The joint venture will undertake production, with each parent company responsible for commercial relationships and sales. The joint venture will provide cold-rolled aluminium as a semi-finished product to Kobe Steel for use at two of its locations: the Moka Plant in Tochigi Prefecture, Japan and subsidiary Kobelco Automotive Aluminium Rolled Products (China) Co., Ltd. in Tianjin, China. Kobe Steel will be able to receive up to half of the Ulsan Plant’s production capacity of approximately 300,000 tons per year.