Japan’s JFE Steel said on Monday it will go ahead with a 46 billion yen ($341 million) plan to triple production capacity of electrical steel sheet at its Kurashiki plant in western Japan to meet growing demand for electric vehicles (EVs).
The move comes after its bigger rival Nippon Steel Corp said earlier this month it would spend 90 billion yen to boost its capacity to make high grade non-oriented electrical steel sheet at two of its domestic steel works.
JFE, the flagship unit of JFE Holdings Inc, had flagged the potential expansion in electrical steel sheet, a key material used in primary motors of EVs, in February.
The latest investment follows its 2021 decision to spend 49 billion yen to double capacity at the plant by September 2024.
After the second expansion is completed by March 2027, output capacity will triple from current levels.
Japan’s second-biggest steelmaker also said it and Indian partner JSW Steel Ltd have reached a basic agreement to form a joint venture to produce electrical steel sheets used in power plant transformers.
Under the plan, which was also flagged in February, the new factory will start operating by March 2028.
A spokesperson at JFE Steel declined to comment on an expected investment cost.
