Mexico's PMP Group and India's Preet Machines Limited expect to open their first micro steel mill in Latin America by February next year, according to media reports.
Micro Steel, the 50/50 JV partnership established by the two companies, expects to open its first project in Paraguay. The “micro” still plant will receive investments of about $48 million and will have a 150,000 mt/year capacity to produce rebar and wire rod.
The two companies expect to invest about $500 million in micro steel mills in the next five years.
Media reports noted the two companies have been facing difficulties to launch steel projects in Mexico due to the strong competition with the imported steel as well as the lack of bank financing.
PMP Group’s director, Gonzalez Mier, said the company is changing the focus of its activities to the automotive segment, as 17 percent of its sales volumes have declined so far in 2015.
Hit by the challenging scenario that threatens the local steel industry, PMP Group said it reduced its workforce to 170 workers from 210. However, a retake in the company’s growth could be expected and could reach up to 15 percent in 2016 if it got new contracts from the automotive industry.