Brazil may block Thyssenkrupp’s sale of Brazil’s steel plant to foreign company: report
16 Jun 2012
German steelmaker Thyssenkrupp's plans to sell its majority stake in struggling Brazil's slab-making joint venture CSA to another foreign company may be blocked by the Brazilian government, Reuters yesterday reported, citing, a source with knowledge of the situation.
Government officials have contacted local steel companies to see if they are interested in buying Thyssenkrupp's 73-per cent stake, said the news agency. The remaining 27 per cent is held by Brazilian mining giant Vale S A.
''There is a government push to ensure that the company ends up in Brazilian hands, but in the end what will govern the decision will be the economics and market aspect of the deal," the source told Reuters.
After posting a €1-billion loss for 2012 at its Brazil and the US operations, Essen-based ThyssenKrupp had put its struggling steel operations in Brazil and the US for sale.
ThyssenKrupp and Vale started building the CSA steel-slabs plant in Rio de Janeiro in 2005 and started operations in 2010, which has a capacity of five million tonnes of steel annually.
ThyssenKrupp's strategy for steel in the Americas is based on two basic premises - slabs were to be produced at a low cost in Brazil and shipped with cost advantages to its plant in Alabama in the US. After processing they would then be sold in the North American market in order to gain from the then booming automobile and construction industry in the US.