Simec to inject $300m in steel mill in São Paulo

As of 2024, Mexican group will produce more 500,000 tonnes of steel/year in Pindamonhangaba unit

07/01/2022


Jaime Moncada Ramos — Foto: Claudio Belli/Valor

Jaime Moncada Ramos — Foto: Claudio Belli/Valor

The Mexican group Simec, the third-largest long steel producer in Brazil, unveiled Thursday an investment of $300 million to increase twofold its steel mill located in Pindamonhangaba, 140 kilometers far from São Paulo.

The company has just received the preliminary permit from São Paulo state’s environmental body Cetesb, which allows it to start the construction works.

The expansion is expected to be ready by mid-2024, with construction and assembly works starting in the second half of the year, said Jaime Moncada Ramos, the company’s chief executive in Brazil. The investment consists of a new electric steel mill and a new rolling mill, with state-of-the-art German technology. The equipment will be shipped from China in July.

With the duplication, the installed capacity of the steel mill in Pindamonhangaba will increase to 1 million tonnes of crude steel (billets) per year. Currently, the capacity is 500,000 tonnes a year. The Mexican group began producing steel in Brazil at the end of 2015 after investing the same amount ($300 million) in a greenfield project in the country.

The Pindamonhangaba unit will expand the supply to the market of straight and rolled rebar – a product used for civil construction and real estate projects – and wire rods, for several industrial applications, such as wires and nails.

According to Mr. Moncada, much of the infrastructure for expansion already exists at the site, next to the current production line, facilitating the installation of the new plant. The location, near Presidente Dutra highway, in the São Paulo-Rio de Janeiro region, is a logistical advantage for the acquisition of iron and steel scrap and for the distribution of products to the market.

In Brazil, Guadalajara-based Simec already serves the markets of the Southeast, South, Central-West and part of the Northeast regions, through steel mills located in São Paulo, Minas Gerais and Espírito Santo.

According to the executive, 1,200 jobs will be generated during the construction work, and 450 employees will be hired to operate the new line in Pindamonhangaba. The generation of jobs and additional taxes is part of the São Paulo state government’s program to encourage new investments in the state.

Three years after starting production in Brazil, Simec became the third-largest manufacturer of long steel (rebar, wire rod, bars and profiles) in the Brazilian market. It is behind the leader ArcelorMittal and Gerdau. It also competes with AVB (Aço Verde), Sinobras and CSN’s long steel business.

This leap, in May 2018, was the result of the acquisition of two steel units of ArcelorMittal (one in Cariacica and another in Itaúna, Minas Gerais) by imposition of CADE, the country’s antitrust body, due to the purchase of Votorantim Siderurgia’s assets in Brazil.

As a result, Simec increased its production capacity of crude steel to 1.1 million tonnes a year at that time, and of rolled products to 1.05 million tonnes.

The project in the city of Cariacica is expected to reach 800,000 tonnes of crude steel, with the expansion of the furnace capacity. New rolling lines for bars, profiles and others are also planned. The investment in the unit is estimated at $80 million to $100 million.

The environmental permit for the project is expected to be issued by IEMA, the state environmental body, in August.

*By Ivo Ribeiro — São Paulo

Source: Valor International

https://valorinternational.globo.com/