ArcelorMittal says it is set to resume an expansion project at ArcelorMittal Vega, a flat steel cold rolling, pickling and galvanizing unit located in São Francisco do Sul (in the state of Santa Catarina) in Brazil.
The ArcelorMittal Brazil business unit of the Luxembourg-based steelmaker says the project involves the construction of a new continuous annealing line and a third galvanization line for the production of cold-rolled and galvanized products. The capacity of the unit is set to increase by 700,000 metric tons to a total of 2.1 million metric tons per year. The increased capacity is expected to be ready in 2021.
The firm says the investment “is expected to sustain ArcelorMittal’s growth strategy in Brazil and Latin America.”
“At the outset of the [financial] crisis, automakers were practically operating to serve the Brazilian and Argentinian markets only,” says Benjamin Baptista Filho, president of ArcelorMittal Brazil and CEO of ArcelorMittal Flat Carbon South America. “The crisis forced automakers to develop alternative markets. We expect the automotive industry to [now] have a substantial increase in the utilization rate.”
Vega’s expansion project has been on hold since 2011 because of the 2008-2009 financial crisis, followed by a Brazilian economic recession and a reduction in Brazil’s market for vehicles. As of 2018, says Baptista Filho, “We currently have a market to sell Vega’s products above the existing capacity. We could be selling more.”