The acquisition of Brazilian slab producer Companhia Siderurgia do Atlantico (TKCSA) by steelmaking group Ternium was a positive move for both the Italian-Argentine group and ThyssenKrupp, the former owner of the local steel producer, analysts and media reports said.
According to a media report from Brazilian newspaper Valor, Ternium reportedly paid EUR 300 per mt at TKCSA, using their installed capacity, which includes a port and a power plant. In order to build a greenfield project or a new mill, investors estimated companies usually could spend as much as US$1,500/mt.
“For Ternium, the acquisition of TKCSA made a lot of sense,” an analyst told Valor.
Ternium has a slab deficit of about 3.5 million mt/year, which it used to compensate by purchasing the product from third party companies. Additionally, supply of the product has been diminishing in the past few years.
“This will enable us to enhance our differentiation,” said Daniel Novegil, CEO at Ternium. “The facility’s specialization in high-end steel slabs, combined with a coordinated product development and supply chain management effort with our high-end steel capacity in Mexico and Argentina, will support new integration opportunities for the manufacturing of sophisticated finished steel products for our customers. This, in turn, will strengthen our business in strategic industrial sectors across Latin America.”