The Brazilian steel industry plans to invest US$ 13 billion in the next five years so as to increase production. With these funds, the country steel production should grow from the 34 million to 50 million tons.
This statement was made by the new president of the Brazilian Steel Institute (Instituto Brasileiro de Siderurgia, IBS), Luís André Rico Vicente, who took office yesterday.
According to Vicente, this expansion does not include projects by Vale do Rio Doce, the largest mining company in Brazil, which may increase the country’s productive capacity as high as 60 million tons.
Vicente believes that this growth is more than enough to supply the domestic demand and cater to exports. According to figures supplied by the IBS, last year exports total led 11.9 million tons of steel, reaching a record value of US$ 5.3 billion, this represented 13.9% of the country trade surplus.
According to Vicente, there are forecasts for a 2.9% drop in exports this year, resulting in sales of 11.6 million tons in 2005.
With regard to the production of steel this year, the new president of the IBS stated that the forecast is for a 2% increase, from 32.6 million tons to 33.6 million tons.
For Vicente the good perspectives for the sector are due to the modernization of the industrial park, to cost reduction and improvement of product quality and managerial methods.
Among the investments that the Brazilian steel sector should receive is the construction of a flat steel factory in the northeastern Brazilian state of Pernambuco.
Russian metallurgy companies TMK and Commetpron have announced that they are willing to invest US$ 2 billion in the mill.
They intend to produce up to 3 million tons a year. Around 80% of the volume should be turned to export.
If the project works out, it would be the first of the kind by Russian companies in the Americas. The companies have already signed a protocol of intentions with the government of the state of Pernambuco.