TOKYO - Asahi Tec Corp.'s takeover of Metaldyne Corp. could help the Detroit area supplier gain access to a key raw material.
Metaldyne uses 82,000 to 90,000 tons of ductile iron a year. Asahi Tec has plants to produce that in Thailand and technology that makes its output particularly appealing.
"We need their materials," says Metaldyne CEO Tim Leuliette.
Asahi Tec's purchase of Metaldyne is expected to close by the end of the year.
"Ductile iron sounds like a boring material," Leuliette says. "It's not." The technology involved "is going to push out forgings" from some suspension applications, such as knuckles, and forestall a switch to aluminum in other parts, he says.
Getting it is a problem, though.
"Ductile iron is becoming more and more difficult to source," Leuliette says. He compares it to steel. After long years of underinvestment, the steel industry suddenly faced a shortage recently - and gained the upper hand in pricing negotiations.
The same is happening in ductile iron. That is why Leuliette salivates over the prospect of an in-house source.
"Fortunately or unfortunately, our Thai facility is at full capacity," said Asahi Tec Chairman Shoichiro Irimajiri. "We've just started to discuss whether to make another facility. That will be the most urgent issue between us," he said, gesturing toward Leuliette at a press event here.
Leuliette clearly does not want a long discussion: "I have a desire to source more ductile iron from Asahi Tec than they can supply."
You may e-mail James B. Treece at [email protected]