ArcelorMittal Announces Resumption of Expansion Project in Brazil

ArcelorMittal is set to resume a $ 330 million expansion project at its Vega plant in the Brazilian state of Santa Catarina. Expansion plans were put on hold in 2011 following the country's recession. The plant mainly produces specialized grades of steel for automotive, construction and household appliances. Construction work will continue for almost three years, with production expected to begin in 2021.

According to a company press release, the proposed investment encompasses the construction of a new continuous annealing line and an additional galvanizing line to increase production of cold rolled and galvanized steel products. At the same time, the Vega plant will have three galvanizing lines to meet the growing market demand for high-strength and high-quality steel products. The expansion project will help increase the plant's production capacity by nearly 700,000 tonnes per year, bringing the total capacity to 2.1 million tonnes.

Benjamin Baptista Filho, President of ArcelorMittal Brazil, noted that the utilization rate of the automotive industry has grown significantly due to their increased focus on the development of alternative markets. Demand for Vega products currently exceeds production capacity, making expansion imperative. Almost 50% of the steel production at the facility goes to the automotive industry, Filo said. In addition, he noted that the multimillion-dollar investment will help support the company's growth strategy in Brazil and Latin America.

The company announced a sharp 56.4% increase in net income in the second quarter of 2018. Operating income reported an increase of nearly a third. The company reported a consistent increase in steel supplies in all regions except Europe.