Ternium's $1.1 Billion Steel Complex Backs Mexico's Auto Industry

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Operations will begin in July 2013 at Ternium S.A.'s (NYSE:TX) (Luxembourg) new Pesqueria steel complex in Mexico. An investment of $1.1 billion has been made in the project, which will produce high-specification steel products for the automotive industry, which is looking to increase annual auto production to more than 1 million units over the next three years.

When Mexican President Felipe Calderon visited the plant, he said, "Ternium's Pesqueria plant represents the most significant single company investment in Nuevo Leon over the last 10 years."

The production capacity of 1.5 million tons of steel annually will allow for import substitution and contribute to the improvement of Mexico's competitiveness in global markets.

The project includes the $330 million Tenigal galvanized steel plant, in which Nippon Steel (TYO:5401) (Tokyo, Japan) has acquired an interest. There is also a $770 million cold rolling plant in the project.

Maximo Vedoya, Ternium's CEO in Mexico said," Thanks to the joint venture with Nippon Steel, the plant will be provided with the most sophisticated steel technology, complying with the highest standards required by the automotive industry worldwide. There will be a decoil line connected to a Tandem cold mill, and a continuous galvanizing line."

The project that Techint Group (Milan, Italy) and Ternium have in Mexico is a long-term project of investment growth for the people, industry and region. Techint and Ternium have shown commitment toward Mexico investing in this long-term project, Vedoya said.

Ternium produces long and flat-steel products with production centers in Latin America and the U.S. It has highly integrated processes to manufacture steel and value-added products. The company was formed in 2005 by the consolidation of three companies in Argentina, Venezuela and Mexico. With a 62% stake, Techint is the principal owner of Ternium.

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