Monday, May 20, 2024

Ternium announces it will build US $3.2B steel plant in Nuevo León

Steel manufacturer Ternium announced Tuesday that it will invest US $3.2 billion to build a new steelworks and cold rolling facility in Nuevo León.

The plant will be located on the company’s existing site in Pesquería, a municipality in the metropolitan area of Monterrey. The multi-furnace facility will allow Ternium to increase its steel production capacity and meet strong international demand for the alloy.

Ternium facilities in Mexico
Ternium México CEO Máximo Vedoya (right) gave federal Economy Minister Raquel Buenrostro (left) a tour of the plant this week. (Máximo Vedoya/Twitter)

CEO Máximo Vedoya described the investment as the largest in Ternium’s history. A video he posted to his personal Twitter account said the new facility will be “the most modern and sustainable steelworks” in the Americas.

It will have its own carbon capture capacity and will use treated wastewater in the steel production process.

Vedoya told a press conference in Nuevo León that the company’s board decided to build a new steel mill in the USMCA area – the United States, Mexico and Canada – but noted that there was a lot of internal debate about exactly where it should be located.

A site in Texas was initially considered but the company ultimately opted for Nuevo León due to the investment it has already made in the state, he said.

Ternium inauguration of plant in Nuevo Leon
Dignitaries attended the new facility’s “inauguration” in Pesqueria, Nuevo Leon, including from left to right: Ternium México President César Jiménez, Ternium CEO Máximo Vedoya, Nuevo León Governor Samuel García and state Economy Minister Iván Rivas. (Ternium)

Construction is expected to commence in December, while the steelworks is slated to begin operations in the first half of 2026.

“The new state-of-the-art installation will complement the company’s new hot rolling mill in Pesquería, which began operations in the middle of 2021,” Vedoya said.

“… This decision is a significant milestone for our company … at a time when we’re consolidating our position as a leading player in the USMCA region,” he said.

Total investment by Ternium – formed in 2005 by the merger of Mexican, Argentine and Venezuelan firms – at its Pesquería site will now increase to some $6.8 billion. “It’s gigantic for us,” Vedoya said.

Governor Samuel García, who appeared alongside Vedoya at the press conference, said on Twitter that “Nuevo León’s moment is now.”

“With Ternium’s mega-investment we will now build the steel for the mobility of the future,” he added.

Inside Pesqueria site
Inside Ternium’s current facilities in Pesqueria. (Ternium)

García told the press conference that a new 18-kilometer highway will be built to link Ternium’s Pesquería site to the ring road in the neighboring municipality of Juárez. The state government will contribute 1 billion pesos (US $58.1 million) to the project, he said.

Nuevo León has attracted significant investment from foreign companies amid the growing nearshoring phenomenon in which manufacturers seek to take advantage of Mexico’s proximity to the United States and other benefits such as competitive labor costs and the presence of a specialized workforce.

Electric vehicle manufacturer Tesla announced in March that it would build a new “gigafactory” near Monterrey, a decision that will spur additional investment in Nuevo León.

García asserted in February that the state will receive over $12 billion in foreign investment this year, which would be roughly double the figure achieved in 2022.

With reports from Forbes México, Milenio and ABC Noticias

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