Capital market-relevant press releases, 2006-05-12, 12:46 PM
Go-ahead for Brazilian steel mill
The Supervisory Board of ThyssenKrupp AG today approved the project to build a steel mill in Sepetiba in the Brazilian state of Rio de Janeiro. The plant, which will be operated by CSA Companhia Siderùrgica do Atlantico, is scheduled to start production in early 2009. "We are pleased to have received the go-ahead for this key element of our integrated growth strategy in the Steel segment. The supply of low-cost, high-quality slabs from Brazil will allow us to harness growth opportunities in our core European market and in the NAFTA region," said Dr. Ekkehard Schulz, Chairman of the Executive Board of ThyssenKrupp AG. "Our objective is to position ourselves globally in the market for high-quality flat carbon steel."
The options for the NAFTA strategy were also presented to the Supervisory Board. ThyssenKrupp Steel aims to achieve a share of at least 5% of the high-value volume market in North America. In parallel with the possible acquisition of Dofasco, which would allow this objective to be reached quickly, other alternatives are being closely examined. A feasibility study is being drawn up for a "greenfield" option with rolling and coating capacities for 4.5 million metric tons of end products per year. Planning to date indicates a total investment of EUR1.8 billion. The results are to be presented to the Supervisory Board at its meeting in August.
With global steel demand continuing to grow strongly, and the company's own requirements for its growth strategy increasing, the capacity of the Brazilian steel mill has been raised from the previously planned level of 4.4 million tons to 5.0 million tons. Of this, 2 million tons of slabs will ensure the full utilization of the German processing facilities, whose bottlenecks are being eliminated through investment in expansion which is already underway. The greater part of the output from the Brazilian plant will be used to implement the NAFTA strategy.
The investment budget of US$2.4 billion for the modified Brazilian steel mill project was approved by the Supervisory Board.
As planned, the world's biggest iron ore supplier CVRD will take a 10% stake in CSA Companhia Siderùrgica do Atlantico.