Delaco Steel and Kasle Steel Announce Joint Venture

DEARBORN, Mich.--(Delaco Steel Corporation and Kasle Steel Corporation, two companies that have long dominated the Southeastern Michigan automotive steel blanking market, announced today the formation of a joint venture to produce automotive steel blanks primarily for exposed applications.

Delaco Kasle LLC will be 51 percent owned by Delaco Steel Corporation. Kasle Steel Corporation will own 49 percent. Delaco Steel Corporation is a certified minority enterprise through the Michigan Minority Business Development Council. Delaco Kasle LLC will operate from the former Quality Coil Processing facility located in Woodhaven, Michigan. The facility is 100,000 square feet with two exposed blanking lines and annual production capacity of 200,000 tons.

"Joint ventures, strategic alliances, whatever name you call them are a vital way to grow businesses," said Roger Kasle, Kasle Steel's Chairman of the Board. "We have proven to be an effective JV partner. Now we have the opportunity to partner with a company that we've watched grow for years. Delaco has an unsurpassed reputation in this market. These are two great companies joining together to meet a very real market need."

"Our customers have been asking us to get involved in exposed blanking for a long time," said Delaco Steel Corporation CEO Gerald Diez. "Kasle brings the experience in exposed blanking and tremendous reputation as a joint venture partner. We were thrilled this deal could be worked out because I think we have created a powerful team."

Delaco Steel Corporation and its affiliates represent the largest minority-owned blanking concern in this country. Until now Delaco's experience has been solely in unexposed applications. Kasle Steel Corporation and its affiliated companies, on the other hand, are the largest producers of exposed steel blanks in the nation.

Blanking is the process by which steel coils are cut into various shaped pieces. These processed blanks are then stamped or formed at an auto manufacturer or tier one stamping plant to form sheet metal parts for use in automobiles, light trucks and heavy trucks. Exposed blanks refer to those pieces used on the exterior surface of a vehicle, like hoods, fenders, door outers, etc.

This is Delaco's second joint venture in less than a year. They announced the formation of Delaco-Kenwal Steel LLC, a steel sales venture in Tennessee formed with Kenwal Steel Corporation in September of 2003. Delaco is also the majority partner with Severstal NA in the Delaco Steel Processing LLC joint venture, which manages slitting for the Detroit-based steel maker.

Delaco Kasle LLC will be Kasle's third on-going joint venture. Kasle is the managing partner in Kasle Metal Processing in Jeffersonville, Ind., a joint venture with Automatic Feed Company specializing in exposed blanking. Kasle and Marubeni Itochu Steel America are partners in the Regional Steel Distribution Center in Holt, Michigan. The RSDC, a General Motors dedicated facility, is the single largest steel processing center in North America.