Publish Date : 13-Dec-2013
ArcelorMittal Long Carbon Americas announces today that it will extend its partnership in Latin America with the Bekaert Group, a worldwide market and technology leader in steel wire transformation and coatings. ArcelorMittal and Bekaert, who have been partners in the region since 1975, have decided to extend their partnership to Costa Rica and Ecuador. These regions are strategic for ArcelorMittal Group operations, especially in the civil construction sector.
Both partners will invest in ArcelorMittal's existing steel wire plant in Costa Rica and also build a new Dramix® steel fibre manufacturing plant on the Orotina industrial site in Costa Rica. The partners have agreed to invest around US$20m over two years in the new plant, which will have an annual production capacity of 20,000 tons of Dramix® steel fibres.
As part of the transaction, ArcelorMittal will have a minority shareholding in the Ideal Alambrec Ecuador wire plant, a company controlled by Bekaert, to be able to take advantage of growth opportunities in the country's civil construction sector.
The operation will be completed by exchanging shareholdings in the various businesses, on a net zero-cash basis. ArcelorMittal will participate as a minority shareholder in Ideal Alambrec Ecuador; Bekaert will become the controlling partner of Costa Rica steel wire; and ArcelorMittal will transfer its 55% ownership of rope business, Osasco (Sao Paulo) Brazil - held through Belgo Bekaert Arames (BBA) - to Bekaert. The transaction also includes wire rod supply agreements, and a rope wire supply agreement for BBA.
This transaction does not impact ArcelorMittal's controlling position in Belgo Bekaert Arames (BBA), a partnership established in 1997 with the Bekaert Group in Brazil.
The agreement
In Brazil, the agreement involves transferring the cable business of Cimaf Cabos in Osasco (Sao Paulo) to the Bekaert Group. Cimaf Cabos, which produces steel cables for infrastructure, mining, oil and gas projects, will no longer be part of Belgo Bekaert Arames (BBA).
However BBA will continue supplying rope wire for cables to Cimaf Cabos, which will be renamed Bekaert Cimaf Cabos.
In Costa Rica and Ecuador, the new agreement between ArcelorMittal and the Bekaert Group will have the same shareholding structure for both countries, where Bekaert will be the controlling partner of the wire businesses. While Ideal Alambrec Bekaert will retain the same name in Ecuador, the steel wire products business in Costa Rica will be renamed BIA Alambres Costa Rica SA, where BIA stands for Bekaert Ideal – ArcelorMittal, and the new Dramix® manufacturing business will be named Bekaert Costa Rica SA.
"The new agreement will strengthen our value chain integration strategy, increasing value to our steel, and expand our wire rod market", said Jefferson De Paula, CEO of ArcelorMittal Long Carbon Americas.
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