Deacero Steel Long Products Output to Reach 4 Million Tons Per Year By 2011

Deacero S.A. de C.V. (Monterrey, Mexico), Mexico's largest steel-maker, is setting up a wire rod and rebar production facility at Saltillo, which will increase its long products output to 4 million tons per year. According to a report by Industrial Info Resources (Sugar Land, TX), the new mini-mill will have a rolling capacity of 800,000 to 1 million tons per year of long products, and a crude steel production capacity of 1.5 million tons per year. The facility is likely to be commissioned by 2011. Danieli SpA (Buttrio, Italy) has been awarded supply contracts for the plant and machinery required to set up the production facility.

Danieli also will deliver a 6-strand continuous casting machine (CCM) and a 150-ton electric arc furnace (EAF). Sources indicate that Deacero's 21-strand rolling facility will use feed from the 120 ton-per-hour walking beam reheating furnace system. The furnace will be directly linked to a continuous casting system, which will take care of the hot-charging of billets. Danieli also will supply equipment to set up a micro profiles mill, which will receive feed in the form of round rebar coils. The new wire production unit will produce the rebar coils. Deacero's facilities produce long products that are widely used in industrial applications, construction, infrastructure and other products.

In a related development, U.S. Shredder and Castings Group (Trussville, Alabama) completed installation of a state-of-the-art shredder unit at Deacero's facility in Mexicali. The system, which includes a sorting system, will process and separate non-ferrous and ferrous metals. The system consists of a metals recovery unit, an air sensory system, and magnetic drums. In 2006, the company commissioned its third wire rod-rolling unit at its facility in Celaya at a cost of $220 million. The expansion, which increased Deacero's production capability from 1.7 million tons per year to 2.7 million tons per year, also was supplied by Danieli.

Danieli ranks among the top global suppliers of plant and machinery to the metals industry. Recently, the company signed an agreement with Vietnam Steel Corporation (Hanoi, Vietnam) to form a $550 million joint venture that will manufacture 2 million tons per year of steel sheets. The project site is at Phy My, near Ho Chi Min City, and is expected to begin operations in 2011. Vietnam Steel will hold an 80 percent stake in the venture, while Danieli will hold the remainder.

Recently, Raul Gutierrez, chief executive officer of Deacero, indicated that the company will take stock of the global economy and the recovery of the steel industry before going ahead with its planned investments or restarting its operations. In October 2008, Gutierrez had stated that the economic downturn would not dampen Deacero's proposed investments in 2009-10. The company had been carrying implementing projects with an investment of $120 million; the projects included galvanizing plants, a new reheating facility at Saltillo, and maintenance facilities at Celaya. Deacero also had announced a $600 million short- and medium-term investment plan. Deacero operates 10 production facilities and 13 distribution hubs across 20 countries, and serves about 8,000 customers.