OREANDA-NEWS. December 20, 2013. ArcelorMittal Long Carbon Americas announces that it will extend its partnership in Latin America with the Bekaert Group, a worldwide market and technology leader in steel wire transformation and coatings. ArcelorMittal and Bekaert, who have been partners in the region since 1975, have decided to extend their partnership to Costa Rica and Ecuador. These regions are strategic for ArcelorMittal Group operations, especially in the civil construction sector.

Both partners will invest in ArcelorMittal’s existing steel wire plant in Costa Rica and also build a new Dramix® steel fibre manufacturing plant on the Orotina industrial site in Costa Rica. The partners have agreed to invest around USD20m over two years in the new plant, which will have an annual production capacity of 20,000 tons of Dramix® steel fibres.

As part of the transaction, ArcelorMittal will have a minority shareholding in the Ideal Alambrec Ecuador wire plant, a company controlled by Bekaert, to be able to take advantage of growth opportunities in the country’s civil construction sector.

The operation will be completed by exchanging shareholdings in the various businesses, on a net zero-cash basis. ArcelorMittal will participate as a minority shareholder in Ideal Alambrec Ecuador; Bekaert will become the controlling partner of Costa Rica steel wire; and ArcelorMittal will transfer its 55% ownership of rope business, Osasco (Sao Paulo) Brazil - held through Belgo Bekaert Arames (BBA) - to Bekaert. The transaction also includes wire rod supply agreements, and a rope wire supply agreement for BBA.

This transaction does not impact ArcelorMittal’s controlling position in Belgo Bekaert Arames (BBA), a partnership established in 1997 with the Bekaert Group in Brazil. 

The agreement
In Brazil, the agreement involves transferring the cable business of Cimaf Cabos in Osasco (Sao Paulo) to the Bekaert Group. Cimaf Cabos, which produces steel cables for infrastructure, mining, oil and gas projects, will no longer be part of Belgo Bekaert Arames (BBA).

However BBA will continue supplying rope wire for cables to Cimaf Cabos, which will be renamed Bekaert Cimaf Cabos.

In Costa Rica and Ecuador, the new agreement between ArcelorMittal and the Bekaert Group will have the same shareholding structure for both countries, where Bekaert will be the controlling partner of the wire businesses. While Ideal Alambrec Bekaert will retain the same name in Ecuador, the steel wire products business in Costa Rica will be renamed BIA Alambres Costa Rica SA, where BIA stands for Bekaert Ideal – ArcelorMittal, and the new Dramix® manufacturing business will be named Bekaert Costa Rica SA.

“The new agreement will strengthen our value chain integration strategy, increasing value to our steel, and expand our wire rod market”, said Jefferson De Paula, CEO of ArcelorMittal Long Carbon Americas.

The transaction is subject to regulatory approvals in certain markets.

About ArcelorMittal Long Carbon in Latin America
ArcelorMittal is one of the largest steel makers (long carbon and wire products) in Latin America, where it has an installed capacity of approximately 8 million tons of crude steel per year in Brazil, Mexico, Argentina, and Trinidad and Tobago. The company is specialized in making wire rods for industrial applications and general usage, rolled products for civil construction and wire products.

In Brazil, operations are distributed throughout four plants in the state of Minas Gerais (Juiz de Fora, Joao Monlevade, Sabara and Itauna), two units in Sao Paulo (one in the state capital and another in the town of  Piracicaba), and one in Espirito Santo state (Cariacica). They have an installed capacity to produce 3.8 million tons in that country. In a partnership with the Belgian Bekaert Group, ArcelorMittal Long Products works in the sector of steel wire products, having production units in Minas Gerais, Sao Paulo and Bahia with a 800,000 tons per year capacity.

In Argentina, ArcelorMittal controls Acindar, a leader in long steel production which has been operating since 1942 and which has industrial, commercial and administrative facilities in the provinces of Buenos Aires, Santa Fe and San Luis. With an installed capacity of 1.7 million tons a year, it produces and distributes high quality steel products, such as bars, wire rods, welded screens, lattices, wires, nails, blanks, corner shapes and accessories.

In Central America ArcelorMittal Costa Rica has two long product production units in the provinces of Limon and Alajuela. The company was founded in 1962 by the Pujol Group and, since 2008, 100% of its stocks have been under the control of ArcelorMittal. Production capacity in Costa Rica is 370,000 tons of long steel per year, serving markets including civil construction and manufacturing and products including bars, structural shapes and wires. With the new steel fibres plant being built, production capacity of steel fibres will be 55,000 tonnes a year in total.

In Mexico, ArcelorMittal produces both long and flat steel from its Lazaro Cardenas integrated steel facility and has a rebar facility in Celaya. It was founded in 1969 as a state-owned company, with its long carbon division starting operations in 1976. It was acquired by the group in 2007. With a total capacity of 1.88 million tons it produces billets, bars and wire rod.

In Trinidad and Tobago, ArcelorMittal is one of the most important steelmakers in the Caribbean.  ArcelorMittal Point Lisas’ principal production facilities comprise three direct reduced iron plants, two electric arc furnaces, two continuous casters for billets and one wire rod mill. It receives its raw material imports and ships its steel products through a dedicated deep-water port facility within its production complex near the waterfront of the Gulf of Paria. ArcelorMittal Point Lisas exports the majority of its wire rod shipments, primarily to steel manufacturers in South and Central America and the Caribbean. ArcelorMittal Point Lisas is also an important producer, exporter, and user of direct reduced iron. It also sells billets in the domestic and export markets and is the supplier to the Costa Rica mills, shipping billets and wire rods.

About Dramix®
Dramix® steel fibres are produced from drawn steel wire, using as raw material wire rod. They are sold in several lengths and diameters, and they can be sold as bonded or loose fibres, depending on the application. Dramix® is a Bekaert-designed and patented steel fibre. These fibres are used to reinforce concrete in combination or by fully replacing the traditional steel frame in industrial floors and pavements, radiers, slope and tunnel lining (shotcrete, segment rings and refractories). Dramix® steel fibres can also be used in compression layers for precast slabs.