Brazilian integrated steelmaker Gerdau is reportedly considering the sale of mills in Mexico and India, as already anticipated by SteelOrbis.
In August 2015 and July 2016 SteelOrbis reported that Gerdau was looking to sell assets in India, Central America and parts of South America.
Gerdau has already sold a 50 percent stake at its Colombian mill, Gerdau Diaco. It also sold a Spanish specialty unit called Sidenor to Clerbil for EUR 155 million.
Reports say the Brazilian company could sell one of its two mills in Mexico, probably Sidertul, which Gerdau bought in 2007 for $259 million. The mill has a 500,000 mt/year crude steel capacity and produces rebar and profiles.
Sidetur depends much on the US, one of its main markets for steel demand. The trade protectionism Trump has shown may limit the mill’s business, making it an easy target for an asset sale.
Gerdau also owns Gerdau Corsa in Mexico, which has a 1 million mt/year crude steel capacity, and SJK Steel in Tadipatri, India, with a 250,000 mt/year crude steel capacity.
Gerdau has been reportedly looking to sell its “non-core” assets as a way to reduce debt. In the past few years, Gerdau has often mentioned during its quarterly earnings call that it wants to get rid of several assets in order to focus on its high revenue assets.
As for the Indian mill, Gerdau could sell parts of it and form a JV, as it did in Colombia with a 560,000 mt/year crude steel capacity mill.