Granges had aimed to manufacture advanced aluminum materials for brazed automotive heat exchangers through a JV with Mitsubishi Aluminum for the North American and Mexican markets.
On Friday, Sweden’s Granges disclosed that it will no longer go ahead with its aluminum manufacturing joint venture plan in the United States with Mitsubishi Aluminum Co saying “current circumstances” have made the project less attractive.
According to Granges’ spokeswoman the feasibility of the project has become less attractive due to U.S. tariffs on aluminum imports.
The joint venture had aimed to combine Granges’ and Mitsubishi Aluminum’s expertise in aluminum rolling and wanted to establish a new U.S. production facility to manufacture advanced aluminum materials for brazed automotive heat exchangers for the North American and Mexican markets.
“Granges has decided to halt the plans for a joint venture in North America, as the project isn’t sufficiently attractive for Granges from a risk-reward perspective given the current circumstances,” said Granges in a statement on Friday.
“It doesn’t have to do with the market conditions…It’s more about the project itself,” said Pernilla Grennfelt, senior vice president for communications and investor relations, declining to be more specific.
She mentioned that U.S. tariffs were impacting Granges in different ways and that the company was seeking exemptions to continue importing certain aluminum coil and aluminum sheet products that it needs to make products in the United States needed by U.S. automotive clients from Europe.
In 2017, Granges had said it had already begun to gradually shift production of foil products for U.S. customers from Shanghai, China to Finspang, Sweden after the U.S. imposed countervailing and anti-dumping duties on imports of such products from China.
On Friday, Granges said, it remained “strongly committed” to the North American market, adding that it was on track with its plans to invest $110 million to expand capacity at its Tennessee operations in the United States. It is also exploring business opportunities for advanced aluminum materials for brazed automotive heat exchangers in North America.