Investment in Brazil totals R$7.8bn after new injection

06/02/2022

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ArcelorMittal’s Sabará unit — Foto: Divulgação/ArcelorMittal/Nitro Histórias Visuais

ArcelorMittal, the steelmaker focused on the automotive and industrial sectors, will expand investments in Brazil by R$144 million, totaling R$7.8 billion. The company has been unveiling new capital injections since early last year.

The new investment unveiled Tuesday will target a production unit in Sabará, in the metropolitan region of Belo Horizonte. This plant started operating in 1917, giving rise to Companhia Siderúrgica Belgo-Mineira. The unit was acquired in the 1990s by the then Arcelor.

According to ArcelorMittal’s statement on Wednesday, the R$144 million investment is aimed at increasing the plant’s production capacity by 35%. The company seeks to offer “high value-added solutions for the automotive and industrial sectors.”

The funds will be used mainly for the acquisition of two new pieces of automated equipment for wire drawing. The company targets the market segment of springs, shock absorbers, screws, fasteners and other industrial products.

“The investment strengthens our position in the Brazilian market and increases the company’s competitiveness in the automotive and industrial sectors. Nine of the 10 best-selling vehicles in Brazil use steel produced at the Sabará unit,” said Jefferson De Paula, CEO of ArcelorMittal Brasil and Aços Longos e Mineração LATAM.

The new products, in the case of the automotive sector, will be used both for entry-level cars and SUVs, the company said.

Mr. De Paula stressed that the increase in the mix of products and solutions will follow the growth of the automotive, tooling and railroad markets, expanding the company’s businesses in this market. Production will be primarily geared to the domestic market. The investment is expected to be concluded by 2024.

The Brazilian subsidiary says that, with the new investment, capital injections in Brazil total R$7.8 billion. Of this total, R$4.5 billion are earmarked to expand Minas Gerais operations.

In Santa Catarina, the company will inject funds to expand the cold and galvanized steel rolling mill. The company is also investing to modernize and improve its portfolio and capacity in the steelmaker in Barra Mansa, Rio de Janeiro.

ArcelorMittal is the largest steel producer in Brazil and makes long and flat steel. Next comes Gerdau, its biggest competitor in long steel for construction and industry. Other competitors are Mexico’s Simec, AVB and Sinobrás (in long steel), Usiminas and CSN (in flat-rolled steel) and Ternium and CSP (in the slab market).

Source: https://valorinternational.globo.com/