Kobe Steel Ltd. of Japan and Alcoa of the U.S. have agreed to refocus an alliance onto aluminum products for the auto industry and away from can-use aluminum. The Japanese steelmaker and the world's largest maker of aluminum will expand their alliance in the automobile-related sector to include the joint development of new aluminum products.

"Our alliance is still ongoing. We've just decided to concentrate our ties on the automobile-related sector and let our can-related alliance go," says Shinji Yano, president of Kobe Steel's aluminum and copper company. Their decision to concentrate on automobile products comes amid increasing demand for aluminum products from Japanese automakers, Yano says. The two firms will also cease their 50-50 joint ventures that produce aluminum can stock used to make beverage cans: Kobe Steel will buy Alcoa's stake in their Kaal Japan joint venture from Alcoa, while Alcoa will take Kobe Steel's stake in their Kaal Australia joint venture.

In the area of automobile-use aluminum sheet, Kobe Steel and Alcoa plan to expand their cooperation by adding research and development efforts in aluminum extrusions, castings and forgings. Such products are used for manufacturing automobile bumpers, frames and door beams. By expanding joint research and development to a wider range of aluminum products, the two firms believe they can meet growing demand for lighter cars and improve their responsiveness to automakers with increasingly global operations.