Japan’s UACJ to Buy American Auto Framemaker

handshake-featUACJ plans to acquire a U.S. aluminum automotive frame manufacturer, aiming to tap expected growth in the North American market.

The Tokyo-based maker of nonferrous-metal products will purchase SRS Industries for $155 million by the end of May under a deal announced earlier this week. SRS is the No. 1 manufacturer of automotive aluminum structural materials in the U.S., according to UACJ. The Michigan-based company operates a total of four American and Mexican plants, generating sales of $117 million in 2015.Thanks to its expertise in producing aluminum bars in complex shapes, SRS enjoys high share among suppliers of such materials for Tesla Motors’ Model S electric car, as well as upmarket vehicles from General Motors and Ford Motor.

Aluminum has begun replacing steel in chassis as automakers work to reduce vehicle weight, partly to meet tightening fuel economy regulations. By acquiring the leader in the field, UACJ aims to broaden its automobile-related business beyond panel materials, for which a new plant will begin operating soon in the state of Kentucky.

“The North American aluminum automotive structural materials market will expand at an annual rate of 25% on average,” a UACJ official said. The company targets annual sales of $180 million in that market within several years. UACJ was born in 2013 from the business integration of Furukawa-Sky Aluminum and Sumitomo Light Metal Industries.

(Nikkei)

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