ThyssenKrupp mulls sale of Brazil and Alabama steel plants: report
20 Jan 2012
ThyssenKrupp AG, Germany's largest steelmaker is considering the sale of its plants in Brazil and in Alabama in the US, German monthly Manager Magazin yesterday reported, citing company sources.
Brazilian mining giant Vale SA, which already holds 26.9 per cent in the plant located in Rio Janeiro, could be a potential buyer, the report said.
Essen-based ThyssenKrupp started operating its CSA steel-slabs plant in Rio de Janeiro in 2010, which has a capacity to produce five million tonnes of steel annually, while its steel mill in Calvert, Alabama, also opened in 2010.
The construction of the plant in Alabama was one of steel maker's biggest ever foreign investments in the US. It spent $5 billion in the overall complex, including $3.6 billion on the carbon flat steel facilities and $1.4 billion on the stainless area.
Due to cost overruns, the overall cost of building the plants in Brazil and Alabama was nearly €10 billion, much above its original estimates of €8.3 billion, and took a €2.9 billion ($3.7 billion) impairment charge in the last fiscal attributable to both mills when it reported a loss.
Heinrich Hiesinger, CEO of ThyssenKrupp told shareholders today at the company's annual general meeting that he is still convinced about the viability of the new steel plants in Brazil and the US, but admitted that construction of the factories was much more expensive than originally planned.
But he did not comment on media reports that the Brazilian and US steel mills are up for sale.
The company this week reported net loss of €1.8 billion ($2.31 billion) on revenues of €43.36 billion for fiscal 2010/11.