Steel Barons: Who’s who in the Brazilian industry

Brazil is the ninth-largest steel producer in the world, with 14 manufacturing companies controlled by ten family and industrial groups.

The country’s industrial park has an installed capacity to make 51 million tons of crude steel per year in 31 mills spread over ten states – Pará, Maranhão, Ceará, Pernambuco, Espírito Santo, Minas Gerais, Rio de Janeiro, São Paulo, Paraná, and Rio Grande do Sul.

Last year, production totaled 36.1 million tons: two-thirds of this volume was manufactured by companies controlled by groups of foreign origin. This concentration evolved in the early 2000s, a few years after the sector’s privatization in the 1990s.

In addition to mergers and acquisitions of assets, the entry of new groups accelerated this movement. For example, Thyssenkrupp, Ternium, Sinobras, AVB, and Simec. From 2017 to now, there have been five asset purchase transactions – four by foreigners and one by a Brazilian (Gerdau).

With a market that lives in tandem with the ups and downs of the Brazilian economy, domestic consumption has for decades oscillated between 100 kg and 120 kg per inhabitant per year of steel products.

For this reason, it is a relevant steel exporter, especially of semi-finished products (slabs and billets) with lower added value. The sector had revenues of R$208 billion (US$40.4 billion) in 2021 and is investing R$52.5 billion between 2022 and 2026.

These are the ten-largest groups in the sector in Brazil:

1. ARCELORMITTAL – MITTAL FAMILY

The Indo-European group, formed in 2006 with the merger of Mittal and Arcelor, is the second-largest globally in production volume – it lost its leading position two years ago to China’s Baowu.

The control, of about 40% of the shares, belongs to the family of Indian-origin entrepreneur Lakshmi N. Mittal, who runs the business together with his son Aditya, who became CEO in February 2021. The founder became executive chairman of the board of directors.

The group is the largest steel producer in Brazil and is growing. The Brazilian operations produce flat and long steels and are also active in the distribution, service center, and manufacturing of various products.

Last year, it made 11.2 million tons of crude steel at its steel mills in Espírito Santo, Minas Gerais, Rio de Janeiro, and São Paulo. It also has an iron ore mining company in the country.

At the end of July, ArcelorMittal informed it had bought 100% of the capital of Pecém’s Steel Company (Companhia Siderúrgica do Pecém – CSP), a slab producer until then controlled by Vale, Dongkuk, and Posco, located in the industrial and port complex of Pecém, in Ceará, in the metropolitan region of Fortaleza.

With this, it has set foot in the Northeast region and added 3 million tons of capacity to the group in the country.

In a separate business from ArcelorMittal, the Mittal family also owns 41% of Aperam, a steel mill specializing in stainless and electrical steel, specialty steel, and alloys. It has operations in Belgium, France, and Brazil.

The Brazilian unit, located in Timóteo (Minas Gerais), has a production capacity of 900,000 tons of crude steel annually. The company is the only stainless steel producer in South America.

2. GERDAU – GERDAU JOHANNPETER FAMILY

Created in 1901 in Porto Alegre from a nail factory by João Gerdau, the Brazilian group is the second largest Brazilian steel producer.

It is controlled by four family branches (brothers) – Germano, Klaus, Jorge, and Frederico, who bear the Gerdau Johannpeter surname. The command is in the fifth generation.

The group specializes in long steel made from iron and steel scrap but also produces flat steel at the Ouro Branco mill (formerly Açominas) in Minas Gerais and specialty steel at three mills – one in Rio Grande do Sul and two in São Paulo state.

The long steel mills are in Ceará, Pernambuco, Minas Gerais, Rio de Janeiro, São Paulo, Paraná, and Rio Grande do Sul. Total production in the country in 2021 was 7 million tons of crude steel.

Outside Brazil, Gerdau is present in South and Central American countries, Mexico, the United States, and Canada, manufacturing long and specialty steel.

3. CSN – STEINBRUCH FAMILY

The oldest flat steel mill in the country, created in 1941 by the Getúlio Vargas government in Volta Redonda (Rio de Janeiro) and operational since 1946, the Companhia Siderúrgica Nacional (CSN) has been controlled by the family of businessman Benjamin Steinbruch since 1993 when it was privatized.

It is a large producer of flat rolled steel and a few years ago also started making long steel on the same site (in smaller volume).

Last year, the company produced 4.26 million tons of crude steel at the Volta Redonda mill. Its main competitor in the country is Usiminas.

CSN also owns an iron ore mining company (listed on B3), a cement plant (second in the country in sales), and power generators and has relevant stakes in railroads (MRS and Transnordestina).

Abroad, CSN operates a flat steel rolling mill in Portugal and long steel (profiles) production plant in Germany.

4. TERNIUM BRAZIL – ROCCA FAMILY / TECHNINT GROUP

A producer specializing in steel slabs, Ternium Brasil is the former Companhia Siderúrgica do Atlântico (“Steel Company of the Atlantic” – CSA), set up by the German group Thyssenkrupp and Vale in the first decade of the 2000s.

A few years after becoming operational, Thyssen decided to dispose of the asset and sold it to Ternium, the flat steel arm of the Italian-Argentinian group Techint, led by businessman Paolo Rocca. The deal took place in 2017 for US$1.79 billion.

Located in the municipality of Rio de Janeiro, the steel mill can produce 5 million tons per year and has its own port terminal.

In 2021, the company produced 4.53 million tons of crude steel (slabs), most of it destined for export, mainly to supply Ternium’s rolling mills in Mexico and the US.

5. USIMINAS – ROCCA/TERNIUM FAMILY AND NIPPON STEEL

Conceived in the late 1950s and started operations in 1962, Usiminas became one of Brazil’s leading flat steel producers, becoming a significant supplier for the automotive industry.

In its origin, it had state capital and a shareholding, in addition to technological support from the Japanese group Nippon Steel.

The plant is located in Ipatinga, in the Steel Valley of Minas Gerais. The company was privatized in 1991 and, under private management, in 1993, acquired the former Cosipa, in Cubatão (São Paulo), by auction.

Last year, it produced 3.2 million tons of crude steel at the mining unit. In Cubatão, for several years, it has operated only the rolling mill units, with slabs acquired from third parties, since the closing of blast furnaces.

The company owns an iron ore mining company.

Since November 2011, Usiminas has been controlled in shared management by Ternium, the flat and long steel arm of the Techint group (Rocca family), and the Japanese group Nippon Steel.

6. SIMEC – VIGIL FAMILY

With almost seven years of operations in Brazil, in 2018, the Mexican group Simec became the third largest manufacturer of long steel in Brazil – rebar, wire rod, bars, and profiles.

Controlled by the Vigil family from Guadalajara, Jalisco state, Mexico, Simec has mills in Pindamonhangaba (São Paulo), which is undergoing a capacity doubling project, Cariacica (Espírito Santo) and Itaúna (Minas Gerais).

The São Paulo plant was set up from scratch (greenfield), and the other two were acquired by purchasing Votorantim Siderurgia in 2017. The Administrative Council for Economic Defense (CADE) required the sale of the two assets. The production capacity was at 1.1 million tons.

In 2021, Simec produced 850,000 tons of crude steel, according to data from the Brazil Steel Institute. The group has a large operation in Mexico and is one of the largest specialty steel producers in the US.

7. VALLOUREC – FRENCH GROUP VALLOUREC

Founded in 1952 in Belo Horizonte by the then German group Mannesmann, steel mill Vallourec, which specialized in manufacturing seamless steel tubes, belongs to the French group Vallourec Tubes, which acquired 100% of its capital in 2005.

In the country, it is managed by the holding Vallourec Tubos do Brasil, which controls other companies, such as an iron ore mining company and a forestry company.

In 2021, at the Jeceaba plant (100 km from the capital of the state of Minas Gerais), Vallourec produced 710,000 tons of crude steel, a material transformed into seamless tubes for applications in several sectors: energy (oil and gas and power generation), industrial machinery and equipment, automotive, infrastructure and construction.

The Barreiro mill, which originated the company in the country, stopped its steelmaking activity in 2016 and started rolling and producing various tubular products.

8. SINOBRAS – VILMAR FERREIRA FAMILY

Sinobras – Siderúrgica Norte Brasil S.A. – is controlled by the Aço Cearense group. Based in Fortaleza, Ceará state, it was founded by entrepreneur Vilmar Ferreira. The steel mill started operations in 2008, with a plant in Marabá (Pará).

Sinobras can produce 380,000 tons of long steel (wire rod, rebar, and others). The company has a project to reach 880,000 tons per year of rolled products.

It plans to install a second rolling mill at the plant, making 500,000 tons of rolled steel annually.

The company is a shareholder with 1% participation in the Belo Monte Hydroelectric Plant.

Last year, the company produced 370,000 tons of crude steel at the Marabá mill, using iron and steel scrap and liquid pig iron as raw material. The company has its own bioenergy reducer (charcoal) for making pig iron.

9. AÇO VERDE DO BRASIL – NASCIMENTO FAMILY

Although founded in the mid-1980s, under another name, and as a pig iron producer, Aço Verde do Brasil (AVB) began steel production, in fact, at the end of 2015, in Açailândia (Maranhão), starting with the manufacture of billets.

In 2018, it started the verticalization by installing a blast furnace for pig iron, with a capacity of 360,000 tons per year, a melt shop, and a rolling mill for finished products (wire rod and rebar), with a capacity of 600,000 tons, adding value to billets. The company also sells pig iron, air gases, and energy.

In 2021, it produced 345,000 tons of crude steel, according to the Brazil Steel Institute. That same year, in May, it started up the second blast furnace, with a similar capacity to the first.

Controlled by the mining group Ferroeste, owned by the Nascimento family, AVB received the seal of the first carbon-neutral steel mill in the world in 2021 – producing steel without using fossil fuels. The company uses renewable energy instead of coke and reuses co-products from its operations.

10. VILLARES METALS – BOHLER-UDDEHOLM GROUP

Founded in 1944 as a branch of the former Aços Villares, the steel mill specialized in special steel and alloys is located in Sumaré, in the countryside of São Paulo state.

It produces tool steel – the leading manufacturer in Latin America – fast steels, valve steels, stainless steels, alloys, and forged parts.

It operates based on scrap and, in 2021, produced 134,000 tons of group steel. Since 2004, Villares Metals has been controlled by the Austrian group Bohler-Uddeholm from Vienna, one of the world’s largest producers of tool steel.

With information from Valor Econômico