MONTERREY, Mexico Mexico
will see a period of consolidation in its steel service center
industry because too many new facilities are being set up in
the country, a top executive in the sector said.
At least 10 new foreign service
centers will be installed in Mexicos central area over
the next few years, targeting the strong local automotive
industry and manufacturing sector, Arturo Marroquín,
general manager of Acero Prime S de RL de CV, said.
The new units will be working
with low utilization levels because there are already several
local service centers in Mexico serving the automotive and
manufacturing industries, Marroquín said at
AMMs 18th annual Mexican Steel Forum.
There are about 50 service
centers in the country, according to Mexican steel
distributors confederation Conadiac.
San Luis Potosí-based
Acero Prime, one of the largest service centers in Mexico, has
been working far below its installed capacity,
Marroquín said last week.
Marroquín expects the new
service centers to be working for four or five years at about
30 percent of their total processing capacity.
"The tendency is that these
service centers will have to merge with other ones to survive.
... I have seen (in the past) some centers that arrived in
Mexico and they were working for three years, but they were not
successful and had to go back to the (United States)," he
"The issue is the (amount of
steel) cutting equipment that will arrive in Mexico,"
Marroquín added. "Do we need (that) many (pieces of)
A version of this article
was first published by AMM sister publication Steel