Analyst: New Belgo mill to add value

The new wielded mesh and truss girder factory that Brazilian long steelmaker Belgo-Mineira opened in Sao Paulo state on May 21 will add value to the company's products, a steel analyst told BNamericas. "The new mill will not make a big difference and was already taken into forecasts but will end up adding value to the steelmaker's products," said Cristiane Viana from Portuguese bank Espirito Santo Securities. The plant will have installed capacity of 60,000t/y of products destined mainly for the Sao Paulo civil construction market. The steelmaker invested 30mn reais (around US$10mn) in the unit and forecasts annual revenue from the plant to total 110mn reais. "The civil construction market accounts for 50% of Belgo-Mineira's sales in Brazil with an emphasis on concrete-reinforcing bars. The sales of wielded mesh and truss girder account for a portion of this," a company spokesperson told BNamericas. Last year, the Belo Horizonte-based company sold a total of 2.19Mt of steel products on the domestic market. The new plant is expected to reach full capacity in six months. "The hope is to produce around 40,000t from the new unit this year, being 24,000t of wielded mesh and 16,000t of truss girder," Carlo Panunzi, the company's president, was quoted as saying by AE Setorial news service. Sao Paulo's strong construction market and developed infrastructure were the factors behind the steelmaker's decision to build the plant in the state. "We did not receive any government incentives. It does not pay to transport this type of product long distances," said Panunzi, who added that Belgo-Mineira used its own resources to build the facility. Belgo-Mineira, Brazil's second largest long steelmaker, is controlled by Luxembourg steel group Arcelor.