Germany and Brazil Join Forces in US$ 3 Billion Steel Project

Luiz Fernando Furlan, Brazil’s Minister of Development, Industry and Foreign Trade, participated last week in the ceremony for the placing of the foundation stone of Companhia Siderúrgica do Atlântico (CSA), in the industrial district of Santa Cruz, in the southeastern Brazilian state of Rio de Janeiro.

The enterprise is the result of a joint venture between German company ThyssenKrupp and the Brazilian mining company Companhia Vale do Rio Doce, and will receive investment of 6.5 billion reais (US$ 3 billion).

The start of the factory’s operations is scheduled for 2009 and the idea is to produce steel plates exclusively for export, mainly to Europe and North America. The German multinational will have 90% participation in the business, and Vale will have 10%.

The forecast is that the complex should have a production capacity of 5 million tons of plates a year, with the generation of 3,500 direct jobs. During the construction, according to information by the Ministry of Development, Industry and Foreign Trade, a total of 18,000 jobs should be created.

The plant’s capacity may be doubled to 10 million tons a year in the future. Apart from the mill, the complex will also count on a port to export the produce. The project is considered by the Brazilian government a marker in the country policy of reducing investment cost.

According to the Ministry of Development, the enterprise will have a 50% tax break on the import of capital goods, as well as a loan of US$ 300 million by the Brazilian Development Bank (BNDES).

"The cheapening of investment in Brazil creates competition with other countries," stated Furlan, adding that ThyssenKrupp may invest another US$ 1 billion in the country in operations in the energy area, with the possible construction of a thermoelectric power plant.

Anba

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