IBS forecasts investments of US$4bn up to 2007

Investments to expand capacity in Brazil's steel industry are expected to total US$4bn by 2007, Jose Armando Campos, president of steel sector entity IBS, told journalists on Wednesday. The investments include projects by flat steelmakers CST and CSN (NYSE: SID) as well as expansions by long steelmakers Gerdau (NYSE: GGB), Belgo-Mineira and Barra Mansa, part of the Votorantim industrial group. The capex forecast does not include new steel projects planned by local mining giant CVRD (NYSE: RIO) along with foreign partners in northern Brazil. IBS plans to repeat a survey of its members in January to update company investment projects. Brazilian steelmaking capacity is forecast to reach 40Mt/y in 2007 from the current 34Mt/y. Campos said that national development bank BNDES is expected to be an important, but not the only, financer of new steel projects. "No one takes loans from just one institution. There are also development banks in US, Germany and Japan that assist in financing projects," he said. Since the time of privatization in the early 1990s, investments have totaled US$13bn.