ArcelorMittal Announces Resumption of Multi-Million Dollar Brazil Expansion Project

SEATTLE (Scrap Monster): ArcelorMittal announced its decision to restart the $330 million expansion project at its Vega plant located in the Brazilian state of Santa Catarina. The expansion plans were put on hold in 2011, following the recession in the country. The plant mainly produces specialized steel grades for the automotive, construction and home-appliance industries. The construction works are likely to extend for almost three years, with initial production expected in 2021.

According to company press release, the proposed investment covers construction of a new continuous annealing line and an additional galvanizing line to boost production of cold rolled and galvanized steel products. With this, the Vega plant will have three galvanization lines to meet increased market demand for high strength and quality steel products. The expansion project will help raise the plant production capacity by nearly 700,000 metric tons per year (Mtpa), thus making the total capacity at 2.1 million Mtpa.

ALSO READ: ArcelorMittal Zenica Completes $35M Steel Plant Upgrade

Benjamin Baptista Filho, President of ArcelorMittal Brazil noted that the utilization rate of automotive industry has witnessed substantial increase due to their increased focus on developing alternative markets. The demand for Vega’s products currently exceeds the production capacity, thereby making the expansion mandatory. Nearly 50% of the steel products manufactured at the facility are directed to automotive industry, Filho said. Further, he noted that the multi-million dollar investment will help in sustaining the company’s growth strategy in Brazil and Latin America.

The company had announced 56.4% jump in net income during the second quarter of 2018. The operating income had reported a surge by nearly one-third. The company had reported sequentially higher steel shipments in all regions except Europe.