Belgo aims to up output 16% by 2004

Brazilian long steelmaker Belgo-Mineira plans to increase installed crude steel capacity 16% to 3.7Mt/y by 2004 from the current 3.2Mt/y, the company said in its annual report. The goal is part of Belgo's 2001-05 investment plan that amounts to 719mn reais (currently US$247mn). Of the total, 393mn reais had been invested up to end-2002, and another 266mn reais is earmarked for this year, the Belo Horizonte-based company said. The steelmaker plans to concentrate investments on expanding capacity and upgrading technology as well as increasing exports of more value-added products, it said. Belgo is currently one of the world's three largest producers of steel cord used in making radial tires. The 1.4Mt capacity of its drawn products division is considered sufficient for the next few years, the company said. "It is good to remember that our planning always takes into consideration a certain dose of caution...We forecast instability for 2003 in the economy and internal and external financial markets," Belgo said. Despite an adverse international setting and uncertainties with the domestic economy, the company retains a positive outlook. "Our confidence is based on our competitive advantages (self-sufficiency in iron ore, self-generation of electric power, among others), in the commitment of our team to achieve goals and the growth potential of our markets," Belgo said. Brazil's domestic steel demand is forecast to grow 6% a year going forward, which is equivalent to at least 1Mt, according to calculations made by steel sector entity IBS. On the domestic front, demand is seen coming from the civil construction and agri-business sectors of the economy. Belgo's South American operations have installed capacity of 4.3Mt/y of rolled products.