Italian-Argentine conglomerate Techint Group will invest US $1 billion to set up a new steel mill in Monterrey, Nuevo León, the group’s CEO announced yesterday.
The hot rolling mill will be developed as part of an expansion of Techint’s industrial center in the municipality of Pesquería, where the consortium first started operations in 2013.
Rocca explained that steel company Ternium — one of six main companies that make up Techint — will undertake the project.
Expected to be operational in the second half of 2020, the new plant will have an annual production capacity of 3.7 million tonnes of steel and manufactured products to meet demand in the automotive industry as well as the home appliance, machinery, energy and construction sectors.
Paolo Rocca presented the plan to President Enrique Peña Nieto in a private meeting in Mexico City before making it public.
The president’s office said that Peña Nieto recognized the global importance of Techint in his meeting with Rocca as well as its significant role in the national steel industry.
The office highlighted that Mexico’s economic stability allowed new opportunities of this kind to be generated.
Techint first entered the Mexican market in 1954 but strengthened its presence in 2005 when it acquired steel manufacturer Hysla and together with the companies Siderar and Sidor created Ternium. Two years later, Ternium consolidated further by purchasing the Mexican company Grupo IMSA for almost US $3.3 billion.
Ternium is now the largest steel company in Latin America with production centers in Mexico, Argentina, Guatemala, Colombia and the United States.
Founded in Milan in 1945 by the current CEO’s grandfather, Agostino Rocca, Techint employs 48,530 people around the world and earned profits last year in excess of US $15 billion. The conglomerate’s total shares are worth just over US $29 billion.
In Mexico, Techint has nine industrial plants and two mining operations as well as five service centers and 11 distribution centers. Last year it produced 3.5 million tonnes of steel in Mexico, accounting for 18.7% of total national production.
According to the National Chamber of the Iron and Steel Industry (Canacero), Mexico was the world’s 13th largest steel producer in 2016 with a total output of 18.8 million tonnes. However, the amount was not enough to meet domestic demand.
Mexico exported 4.5 million tonnes of steel last year but imported 13.9 million tonnes.
The domestic steel industry contributes to 1.9% of Mexico’s total gross domestic product (GDP), 6.2% of industrial GDP and 10.6% of manufacturing GDP.
Source: Milenio (sp)