Steelmaker, which acquired a line to make high added value, pre-painted steel in South Korea, has a project valued at up to R$400m

11/01/2022

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Luis Fernando Martinez — Foto: Silvia Zamboni/Valor

Brazilian steelmaker CSN wants to occupy a market seen as relevant for high-value-added steel that is currently served by imported material, almost entirely from China. This type of steel, qualified as pre-painted, is used to make white goods like refrigerators, freezers, washing machines, and others, and others, like as coating panels for home construction.

The company is preparing an investment of R$350 million to R$400 million to set up a production unit in Brazil, in a place to be defined this month or by the end of the year. The steel company has acquired in South Korea a complete sheet-painting plant, which will have an annual capacity of 160,000 tonnes, said Luis Fernando Martinez, CSN’s chief commercial officer.

According to him, the rolling mill belonged to the South Korean steelmaker Hyundai Steel and had been paralyzed since September 2020. It is being disassembled and will start being shipped to Brazil later this month.

“We have been analyzing this project for some time, aiming to add value to CSN’s galvanized steel,” the executive said. To make the pre-painted steel, the company uses its own galvanized steel coils.

Mr. Martinez said that there are a few potential sites where the plant could be assembled, including Araucária (Paraná), where it already has operations; Volta Redonda (Rio de Janeiro), next to CSN’s steel production plant; São Paulo; and the Northeast region. All these possibilities, with more or fewer chances, depend on negotiations for the concession of incentives, besides logistics and trained employees.

CSN plans to start the operation of this industrial unit in up to 18 months, seeking to speed up construction and to begin sales to the market in the first quarter of 2024. The infrastructure in Araucária and Volta Redonda is ready, which is seen as an advantage. “This speeds things up,” he said.

Brazil currently imports 165,000 tonnes per year of pre-painted steel coils, he said. “We want to occupy this space and replace imports.” Almost 95% of the material comes from China, through ports in Santa Catarina. São Francisco do Sul, Imbituba, and Itajaí account for almost 91%, according to data from importers.

CSN is already Brazil’s only producer of pre-painted steel. The company’s rolling mill facilities in Araucária have an installed capacity of 120,000 tonnes a year. “We are operating at maximum capacity,” said Mr. Martinez, stressing that it is a booming market.

The Brazilian market for this type of steel last year totaled 259,000 tonnes, according to data from the Brazil Steel Institute and the Economy Ministry. Of this volume, 156,800 tonnes were absorbed by the home construction activity, while 45,100 tonnes were used to make housewares and for commercial purposes. Capital goods, especially electronic materials, accounted for 33,200 tonnes. The automotive industry, the fourth-largest market, accounted for 11,600 tonnes.

Companies such as Whirpool, Panasonic, Metalfrio, Kingspan (panels), Metalúrgica Barra do Piraí, Marko (roof tiles), Imbera, Panatlântica, Facchini (vans), J. Paulatti, Fiat, Elevadores Atlas, and Frigelar are among the users of pre-painted material in Brazil, sources say.

Imports have had continuous growth in the last five years: they went from 73,000 tonnes in 2017 to 95,000 in 2018, 119,000 in 2020, and 165,000 last year, according to official data.

Mr. Martinez said that the applications of pre-painted sheets have been growing in several sectors, many of which it cannot serve. He cited, for example, trailers and semitrailers, van manufacturing (which uses a lot of aluminum, a competitor metal), building facades that imitate wood, and other architectural solutions.

From its Araucária unit, CSN delivers the material to the clients cut in the format ordered, painted, and packaged with plastic film, said Mr. Martinez. In other words, ready to enter the production line. “With the new line, which will further increase quality, we will be able to replace the so-called post-painted steel [painting done at the client’s site or service provider] with pre-painted steel. This is one more market,” the executive said. “A lot of imported material doesn’t meet quality standards.”

*By Ivo Ribeiro — São Paulo

Source: Valor International

https://valorinternational.globo.com/