SÃO PAULO Latin American steelmaker Ternium SA does not plan to join forces with another company for a possible acquisition of ThyssenKrupp AGs 73.13-percent stake in the 5-million-tonne-per-year Cia. Siderúrgica do Atlântico (CSA) slab plant in Brazil.
"We would not seek (partners for the potential acquisition of) CSA, not even Usiminas (Belo Horizonte, Brazil-based Usinas Siderúrgica de Minas Gerais SA) as it has now other targets, such as its turnaround," Ternium chief executive officer Daniel Novegil said during a conference call with investors and analysts.
However, he emphasized that it would make sense for Ternium to check if there is an integration opportunity for the company at CSA, since it is a major purchaser of slab.
The Luxembourg-based steelmaker currently buys 3 million to 3.2 million tonnes of slab per year to feed its own flat-steel rolling facilities in Mexico.
Ternium Mexico SA de CV is able to produce as much as 6 million tonnes of flat steel products annually, but it can produce only 2.3 million tonnes of slab per year.
Some of the companys slab needs are supplied by Siderar SAIC, Terniums Buenos Aires, Argentina-based subsidiary.
"We have two options: to build a greenfield operation in Mexico, which would take at least four years to complete, or to go for CSA, which is a new facility, to fulfill our (slab) needs," Novegil said.
Ternium also had been studying the feasibility of building a greenfield slab plant in the industrial area of the Açu Superport in Brazils Rio de Janeiro state. "We will maintain our options," he said. "We are not closing the pages (on the investment in Açu)."
However, he noted that Ternium had to write down its previous expenses on the Açu project as a consequence of delays related to natural gas supplies and London-based Anglo American Plcs Minas-Rio iron ore project, which would feed the slab unit.
Novegil did not disclose the amount of the Açu write-down.
A version of this article was first published by AMM sister publication Steel First.