Company has become Brazil’s first carbon-neutral steelmaker
10/17/2022
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2022/0/M/LcJlPGQJ2jBbD9zuAJdQ/140922aco-20verde21.jpg)
Silvia Nascimento — Foto: Silvia Zamboni/Valor
At a time when there is a global race for decarbonization in the steel industry, the largest emitter of carbon dioxide in the industrial sector, Aço Verde do Brasil (AVB), a small long steel mill in Açailândia, Maranhão, has already overcome this challenge. The company already manufactures its steel without using fossil fuels. This has earned AVB — which has only seven years of operation — a certification issued by SGS as the first carbon-neutral manufacturer in this segment.
The mill’s emissions, measured since 2018 by SGS, were 0.1 tonne of CO2 per tonne of crude steel manufactured that year. In the following ones: 0.06, -0.04 and 0.02 tonne of carbon dioxide. The small increase in 2021 is linked to the start-up of the blast furnace 2. The measurements followed World Steel Association (WSA) standards.
The world average of CO2 emissions in the steel sector, involving the various types of mills, is 1.84 tonnes of CO2.
Silvia Nascimento — a shareholder together with other members of the Nascimento family — has been in the executive command of the company since April and wants more. “Our goal is to make AVB also a company with zero waste generation.” To achieve this, she is investing in projects to turn this waste into co-products for use in the company’s own facilities.
“We don’t use fossil fuels and we reuse all the gases emitted at the plant in production equipment operations,” she said. “And now we will reuse all the waste.”
While increasing steel production, after starting operation of a new blast furnace, the company is investing nearly R$70 million in a thermoelectric plant to generate 12 MW of energy from the recovery of gases generated in the production process. It is expected to be completed by the end of this month. The energy generated in the thermal plant will supply one third of the company’s consumption. It will replace part of the renewable energy that is currently purchased.
“Our philosophy is sustainability,” says the businesswoman and executive, a native of Belo Horizonte, capital of Minas Gerais state, who was “summoned” by her father at the end of 1999 to help him run the business of the Ferroeste group. “I have been with the company for 23 years. I left several things behind in the United States, where I was at that time, and became more involved in the family business.”
Since then, she has held leadership positions in the companies of the group. In 2008, a project arose to add value to pig iron, made by Gusa do Nordeste, and steelmaker AVB was created from this base in Açailândia.
The project faced some obstacles, including the global financial crisis (Lehman Brothers’ bankruptcy), which scared away potential financing and affected the purchase of equipment. After several years of persistence and investments of over R$1.5 billion, says Ms. Nascimento, the steel mill was ready. It started operating at the end of 2015 producing pig iron and billets.
Three years later, the company began with the rolling mill equipment, able to make 600,000 tonnes per year. It has become the largest long steel mill in the Northeast region.
The time of the steel mill construction process allowed the company to improve the project, the executive said. “We have a business that goes from planted eucalyptus forests, to make the biocarbon for the pig iron blast furnace, to the final product. We even have a gas factory installed in the plant, which is common only in large steel mills,” said Ms. Nascimento.
The executive has a degree in Business Administration from the University of Miami, where she lived for nine years, three of which in a boarding school. In Brazil, she took the Program for Development of Managers (PDD) at Fundação Dom Cabral, near Belo Horizonte, in 2004.
After that, a full dedication to the company. She has held several positions at AVB, until reaching the top, when she became CEO. Most of her time is divided into managing office in the capital city of Minas Gerais, where she lives, the mill in Açailândia — monitoring the operation — and São Paulo, for contacts with the financial market.
In 2021 and this year, the company issued two Certificates of Agricultural Receivables (CRA), totaling R$650 million, to strengthen its capital structure and invest in the eucalyptus reforestations (more than 60,000 hectares) it has in Maranhão and Piauí. Also at the end of last year, AVB obtained approval with the Securities and Exchange Commission of Brazil (CVM) in the B category (over-the-counter securities).
According to the executive, the company acts as if it were already publicly traded, publishing its earning reports on a quarterly basis and advancing in corporate governance. For 2023, for example, at the next shareholders’ meeting, she intends to appoint three independent board members. Today the board is formed by her, her father (who chairs it), her brother, and her sister. The members will be people with experience in the real estate market, sustainability, and the financial sector.
Is all of this a preparation for a future IPO on the stock exchange? Ms. Nascimento does not deny this, but says it is still too early to decide on an IPO.
By Ivo Ribeiro — São Paulo
Source: Valor International