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The plant will produce cold drawn tube under a joint venture between JFE Shoji, Mexican steel pipe manufacturer Productos Laminados de Monterrey (Prolamsa), and Japanese tube manufacturer Sankin Corp, JFE Shoji said this week.

The project – called A4C-Sankin Precision Tube, P.I. – is expected to benefit from the “rapidly increasing” investments by Japanese and Western carmakers in Mexico.

“In the auto-parts industry, demand for higher quality cold drawn steel tube has been increasing, prompting the shift to local purchasing,” JFE Shoji said.

The scheduled date for the establishment of the joint venture is April this year, with Prolamsa set to hold a majority stake in the company.

The plant will be located in the suburbs of Monterrey city, Mexico, near Prolamsa’s main factory, the Japanese company said.

“The company is expected to capture these demands of not only Japanese customers, but also American and European customers as well, with responding to the customers’ requirement, and exercising manufacturing and sales activities on the forefront of the market,” it added.

No information about the timeframe or production capacity of the plant was disclosed, however.