ArcelorMittal, the global steel giant commanded by the Indian businessman Lakshmi Mittal and his son Aditya Mittal (CEO of the company), has decided to bet high on the Brazilian market. In 12 months, the group, based in Luxembourg and headquartered in London, has approved investments of R$7.6 billion (almost $1.5 billion) in four projects to expand supply in the country.
The last of them was announced on Thursday, with investments of R$1.3 billion ($250 million), for expansion and adding value to products from the Barra Mansa mill, in Rio de Janeiro state. This facility was acquired from Votorantim group in 2018 and is strategic for being in the middle of the largest steel consumer market in the country – the Rio-São Paulo corridor – and availability of ferrous scrap, the raw material of the plant.
“Our investment is the largest announced from a steel company in the country and this shows our confidence in Brazil and the market growth in the coming years,” said Jefferson De Paula, president of ArcelorMittal Brasil and CEO of the group for LATAM Long Steels and Brazil Mining, in an interview with Valor. The investment package covers the flat and long steel and iron mining segments, in operations located in SC, MG, and RJ.
“It will not stop there,” said Mr. De Paula, who has been in charge of AMB since the beginning of November. He justifies this confidence with the expected demand from various sectors – civil construction, infrastructure, sanitation, renewable energy (wind and solar), oil and gas, and agricultural implements, machinery, and trucks, all goods in great demand by agribusiness.
After an atypical growth in 2021 – more than 20% compared to the previous year –, the apparent consumption of steel in Brazil should return in 2022 to normal levels, from 3% to 5%, said the CEO. For him, it will consolidate in an average increase of 4% per year as of 2023. Last year, the company saw its sales rise more than 24%. In total, it sold 11.7 million tonnes, being 7 million of flat steel and 4.7 million of long steel.
“With these investments, which will be made over three years [from mid-2021 to mid-2024], we seek to consolidate our position as a leader in the Brazilian market in the long steel segment”, adds Mr. De Paula. Around 80% is for servicing local customers and 20% for exports. The company is the largest steel producer in the country, ahead of Gerdau, CSN, Usiminas, and Simec.
According to the executive, ArcelorMittal Brasil was responsible last year for 21% of the operational result (by EBITDA criteria) of the group’s total, with $4.15 billion. “With these investments, just in long steel, we will add 1.5 million tones (1 million in the Monlevade-MG mill and 500,000 in Barra Mansa),” says Mr. De Paula. As for flat steel, the Vega mill (in São Francisco do Sul, state of Santa Catarina) will produce more than 700 thousand tonnes of rolled material for application in the automotive, white line, and civil construction sectors.
In the Barra Mansa plant, the investment will contemplate a new rolling mill for bars, of many sizes, of 400,000 tones, the expansion of the capacity of the current one, from 300,000 to 380,000 tonnes, improvements in the manufacturing processes to offer material of high added value, especially for the automotive and oil markets. In addition, the company will start producing medium profiles, a product with strong demand in metallic construction. For example, warehouses and silos.
“We are a world leader in medium profile manufacturing and now we are entering here,” said Mr. De Paula. With the investment, the mill “will be very modern in terms of long steel technology, operating with two steel units (melt shop). And its capacity for rolled products will be increased by 500,000 tonnes, reaching 800,000 tonnes. The project is to be concluded in the first quarter of 2024, generating 200 direct jobs, 120 indirect jobs, and 1,200 on the construction site.
The estimate is that the expansion, with its new line of long products, will add EBITDA of $70 million per year when the mill is fully operational.
ArcelorMittal, the global steel giant commanded by the Indian businessman Lakshmi Mittal and his son Aditya Mittal (CEO of the company), has decided to bet high on the Brazilian market. In 12 months, the group, based in Luxembourg and headquartered in London, has approved investments of R$7.6 billion (almost $1.5 billion) in four projects to expand supply in the country.
The last of them was announced on Thursday, with investments of R$1.3 billion ($250 million), for expansion and adding value to products from the Barra Mansa mill, in Rio de Janeiro state. This facility was acquired from Votorantim group in 2018 and is strategic for being in the middle of the largest steel consumer market in the country – the Rio-São Paulo corridor – and availability of ferrous scrap, the raw material of the plant.
“Our investment is the largest announced from a steel company in the country and this shows our confidence in Brazil and the market growth in the coming years,” said Jefferson De Paula, president of ArcelorMittal Brasil and CEO of the group for LATAM Long Steels and Brazil Mining, in an interview with Valor. The investment package covers the flat and long steel and iron mining segments, in operations located in SC, MG, and RJ.
“It will not stop there,” said Mr. De Paula, who has been in charge of AMB since the beginning of November. He justifies this confidence with the expected demand from various sectors – civil construction, infrastructure, sanitation, renewable energy (wind and solar), oil and gas, and agricultural implements, machinery, and trucks, all goods in great demand by agribusiness.
After an atypical growth in 2021 – more than 20% compared to the previous year –, the apparent consumption of steel in Brazil should return in 2022 to normal levels, from 3% to 5%, said the CEO. For him, it will consolidate in an average increase of 4% per year as of 2023. Last year, the company saw its sales rise more than 24%. In total, it sold 11.7 million tonnes, being 7 million of flat steel and 4.7 million of long steel.
“With these investments, which will be made over three years [from mid-2021 to mid-2024], we seek to consolidate our position as a leader in the Brazilian market in the long steel segment”, adds Mr. De Paula. Around 80% is for servicing local customers and 20% for exports. The company is the largest steel producer in the country, ahead of Gerdau, CSN, Usiminas, and Simec.
According to the executive, ArcelorMittal Brasil was responsible last year for 21% of the operational result (by EBITDA criteria) of the group’s total, with $4.15 billion. “With these investments, just in long steel, we will add 1.5 million tones (1 million in the Monlevade-MG mill and 500,000 in Barra Mansa),” says Mr. De Paula. As for flat steel, the Vega mill (in São Francisco do Sul, state of Santa Catarina) will produce more than 700 thousand tonnes of rolled material for application in the automotive, white line, and civil construction sectors.
In the Barra Mansa plant, the investment will contemplate a new rolling mill for bars, of many sizes, of 400,000 tones, the expansion of the capacity of the current one, from 300,000 to 380,000 tonnes, improvements in the manufacturing processes to offer material of high added value, especially for the automotive and oil markets. In addition, the company will start producing medium profiles, a product with strong demand in metallic construction. For example, warehouses and silos.
“We are a world leader in medium profile manufacturing and now we are entering here,” said Mr. De Paula. With the investment, the mill “will be very modern in terms of long steel technology, operating with two steel units (melt shop). And its capacity for rolled products will be increased by 500,000 tonnes, reaching 800,000 tonnes. The project is to be concluded in the first quarter of 2024, generating 200 direct jobs, 120 indirect jobs, and 1,200 on the construction site.
The estimate is that the expansion, with its new line of long products, will add EBITDA of $70 million per year when the mill is fully operational.
Source: Valor International