Mexican steel producer Grupo Simec acquires two plants from Arcelor Mittal in Brazil

7 May, 2018

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Grupo Simec, S.A.B de C.V., announced that, through its subsidiary Industrias CH, S.A de C.V. (ICH), it has entered to a contract with Arcelor Mittal Brasil, S.A. for the acquisitions of the steel products plants of Cariacica and Itauna, both in Brazil and for steel wire drawn equipment for the production of wires and derivatives. The financial terms of the acquisition were not disclosed.

The production capacity of Cariacica plant is 600,000 mt/year of liquid steel and 450,000 mt/year of rolled steel products. This plant has more than 500 employees and produces light structural rods and profiles. The factory is located in the city of Cariacica, next to the city of Victoria, in Espirito Santo State, on a land of more than 1,200,000 m2.

The production capacity of Itauna plant is 120,000 mt/year of rolled steel products, being able to produce light structural profiles and rods. This plant has 94 employees and it is located in the city of Itauna of Minas Gerais State, less 100 kilometers away from the city of Belo Horizonte. Currently, the Itauna plant is leased, which will expire on August 2020.

The steel wire drawn equipment, which has 120,000 mt/year capacity of production, during the second half of 2018 will be installed in our Pindamonghangaba, Sao Paulo plant. This Simec plant has a production capacity of 600,000 mt/year of liquid steel and 500,000 mt/year of rolled steel products, rod and wire rod (raw material of wires and derivatives).

ICH will accumulate with these acquisitions 7.5 million mt/year production capacity of liquid steel among all its factories of Mexico, Brazil, United States of America and Canada, which are operated by more than 5,000 employees.

These acquisitions will be pay with Simec's own resources from its Brazilian subsidiary (GV do Brasil Industria e Comercio de Aço Ltda), therefore, the financial structure of Simec and ICH will remain healthy and without debt.

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