France-based tube and pipe producer Vallourec has announced it will transfer pig iron and steel output at its Belo Horizonte mill, in the state of Minas Gerais, by 2018.
According to Vallourec, the No. 2 blast furnace of its Belo Horizonte plant will be idled in April this year. In addition to the shutdown of the equipment, the company will halt output at its No. 1 blast furnace in the same mill will in H2 2018. The Belo Horizonte steelworks area should also be deactivated by 2018, it added.
As the Belo Horizonte mill is closed, Vallourec will concentrate pig iron output at its Jeceaba plant, in the city of same name in the state of Minas Gerais.
Vallourec didn’t indicate whether workers at the Belo Horizonte plant would be laid off.
Vallourec’s decision in
Brazil is part of a company’s move to cut output worldwide. The company said earlier this week it will halve its European output capacity and raise about EUR 1 billion from selling equity.
In addition to the cut in capacity in Minas Gerais, Vallourec will merge the two companies it has in
Brazil, Vallourec Tubos do Brasil and Vallourec & Sumitomo Tubos do Brasil, into one company. The new company will be called Vallourec Soluções Tubulares do Brasil, in which Vallourec will have an 85 percent stake, while Nippon Steel & Sumitomo Metal Corporation, NSSMC, will detain another 15 percent stake.
Vallourec & Sumitomo Tubos do Brasil (VSB) is JV between Vallourec and NSSMC. Vallourec has a 56 percent stake in the company, while NSSMC has another 44 percent stake in the business.