Kyoei Steel Ltd. is wagering ¥38 billion ($255 million) on a Texas production facility expansion, marking the Japanese steelmaker’s largest investment as domestic demand continues its three-year slide.
The Osaka-based company broke ground on modernizing its Vinton Steel subsidiary near El Paso, aiming to double the plant’s capacity to 300,000 net tons annually by early 2027, Nikkei reported. The project will add 188 jobs to the existing 360-person workforce.
Chairman Hideichiro Takashima cited Japan’s constrained market conditions in defending the overseas push. The company expects to manufacture reinforcing bars and industrial steel products for construction and mining sectors.
Japan’s crude steel output fell 3.4% in 2024 to 84.01 million metric tons, extending a decline that began in 2022. The industry faces persistent headwinds from weak construction demand and competition from Chinese imports, prompting domestic producers to seek growth abroad.
The Vinton facility expansion comes despite the subsidiary’s troubled safety record. Federal regulators fined the plant $269,000 in 2024 for worker safety violations and placed it under enhanced oversight following multiple workplace incidents.
Kyoei’s investment reflects broader challenges facing Japanese steelmakers as they navigate declining domestic consumption while global steel demand contracts for a third consecutive year. The company projects the Texas expansion will generate $17.9 billion in regional economic impact over 36 years.
