Grupo Simec set to invest US$340mn in Minas Gerais

Mexican steel company Grupo Simec has signed a protocol of intentions with the government of Brazil's Minas Gerais state outlining 1.3bn reais (US$340mn) in investments over the next few years.

Simec's investments include the expansion of its Itaúna unit, as well as the expansion of rolling, drawing and continuous casting activities in the state, local paper O Tempo reported.

The Mexican firm acquired the Itaúna and Cariacica industrial plants, as well as wire drawing equipment, from ArcelorMittal Brasil in April 2018.

The deal came about due to an obligation established by local antitrust watchdog Cade to approve the ArcelorMittal-Votorantim long steel operations merger. Cade approved the deal on February 2018 with certain restrictions, including the obligation to divest some assets.

STEEL

The steel industry has an important economic role in Minas Gerais state, which is Brazil's most important in steel production.

According to data from local steel association IABr cited by the report, Minas Gerais was responsible for 31.6% of total domestic steel output, with 1.77Mt produced in January-February.

In the case of rolled and semi-finished steel products, Minas Gerais' share of domestic production was 28.5% in the period.