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ArcelorMittal Enters Brazilian Steel Service Centre Market
04/04/2008 - ArcelorMittal has acquired a 50% share of Gonvarri Brasil to form a steel service centre joint venture, laying the foundations for building a strong presence in the Brazilian flat steel downstream segment.
ArcelorMittal has acquired a 50% share of Gonvarri Brasil to form a Steel Service Centre joint venture.
ArcelorMittal and Gonvarri group have had a close relationship for many years, with ArcelorMittal holding a significant stake in Gonvarri Holding and also serving as a major supplier. The two groups already own a common facility in Senica, Slovakia, which started operations in 2007.
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Gonvarri Brasil opened its first steel service center in 1999 in Curitiba, Paraná State, mainly dedicated to the automotive sector.
In 2002, the Gonvarri Group opened a second SSC in Campinas to continue with its growth strategy in Brazil and for supplying the industrial sectors of the São Paulo area.
Today the company is one of Brazil’s leading flat steel processors, with activities including pickling, slitting, blanking, cutting to length, and a total processing capacity of around 1.3 million tons of steel.
The company has 320 employees and owns more than 80,000 square meters of facilities.
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With its acquisition of a 50% interest in Gonvarri Brasil—one of the country’s major players for servicing automotive, industry, and distribution customers—ArcelorMittal intends to build a strong presence in the Brazilian flat steel downstream segment, comparable to the leadership of its Tubarão (Vitoria) and Vega do Sul plants. The company said the acquisition will also lead to synergies with ArcelorMittal Belgo's existing distribution network in Brazil, which is active both in flat and long products.
"This is a first step for Steel Solutions and Services (AM3S) in Brazil,” said Gonzalo Urquijo, Senior Executive Vice President and member of the Group Management Board, in charge of Long Products and ArcelorMittal Steel Solutions and Services. “This joint venture will allow ArcelorMittal and Gonvarri to become a major player in the Brazilian steel downstream market, with significant growth expected in the next years by operating state-of-the-art facilities.”
As one of Brazil’s leading flat rolled steel processors, Gonvarri Brasil’s operations include pickling, slitting, blanking, and cutting to length. The company has a total processing capacity of around 1.3 million tons of steel.
"This JV is an important step in the strengthening of our relationship with ArcelorMittal, allowing us to develop synergies and paving the way for further partnerships. It will also allow us to further grow in this very promising market," said Jon Riberas, Gonvarri's CEO.
Created in 1958 in Spain, Gonvarri Group is a leader in the steel service center field, managing 15 steel service centers in seven countries, processing 3 million tons of steel per year with more than 2000 employees.
ArcelorMittal is the world's largest and most global steel company, with 310,000 employees in more than 60 countries. The company leads a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 28 European, Asian, African and American countries exposes the company to key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
ArcelorMittal’s key financials for 2007 show revenues of USD 105.2 billion, with a crude steel production of 116 million tonnes, representing around 10% of world steel output.
