Acindar to relocate tire wire plant

Thursday, January 31, 2008

Argentine long steelmaker Acindar plans to move its tire wire manufacturing line to Brazil in the second half of the year, a company executive told BNamericas.

"It only involves moving one line that produces and sells 5,000t/y to the regional market," the executive said, adding that the rest of the company's wire production will continue in Argentina.

The executive said that Acindar's decision to relocate this portion of its operations from the plant in Buenos Aires province's Villa Constitución was prompted by mounting pressure from tire manufacturers to lower wire prices, making it impractical to ship the product from Argentina.

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The production line's profitability is in the red which affects the profit margin of the entire business, according to the executive.

Tire manufacturers are currently purchasing wire from South Korea at very low prices. "Acindar can't compete very well with this product because of the plant's low output."

The executive also reported that that none of the plant personnel at Villa Constitución will lose their jobs as a result of the move since they will be re-situated in other production areas.

European steelmaker ArcelorMittal (NYSE: MT) controls Acindar through ArcelorMittal Belgo, part of the European group's Brazilian subsidiary ArcelorMittal Brasil.