Ternium SA, Latin America’s leading steel company, pushes forward with its growth plans. The company believes that regional governments have awakened to China’s unfair competition.
Máximo Vedoya, Ternium’s CEO, shared this insight during a recent interview. China’s economic slowdown has led to increased steel exports, flooding the global market with cheap products.
This surge comes at a time when the world is leaning towards protectionism. Ternium, however, sees an opportunity in this challenging landscape. The company is ramping up investments, particularly in Mexico.
Mexican authorities have tightened anti-dumping measures to protect a manufacturing boom. Vedoya emphasized that Ternium is growing and creating jobs in Mexico, showing no signs of slowing down.
Brazil’s government is also taking action to protect its steel industry. This shift in policy reflects a growing awareness of the need to safeguard domestic manufacturing.
Vedoya stated that no company in the world can compete with the Chinese state. Ternium is well-positioned to benefit from nearshoring as companies move manufacturing supply chains to Mexico from Asia.
Mexico’s Economic Outlook
However, Vedoya stressed the need for clear rules for private investment. He also called for increased infrastructure spending to meet growing demand.
The new Mexican government, led by President Claudia Sheinbaum, faces important challenges. Vedoya suggested that the administration should invest in renewable energy and reduce energy costs.
He also emphasized the need to improve roads, railways, and border crossings with the United States. While nearshoring has generated much discussion, some economists argue that it has been slow to materialize.
Tesla Inc., for example, has delayed building a plant near Monterrey. The company wants to see how the U.S. elections unfold before making a decision.
Despite these challenges, Vedoya remains optimistic about Sheinbaum’s transition to power. He believes nearshoring will continue regardless of the U.S. election outcome.
However, it’s too early to predict how Sheinbaum’s policy reforms will affect the business climate. Ternium executives expect higher prices and lower costs to drive a recovery in profit margins.
The company has already started manufacturing sophisticated steel for the automotive industry in Mexico. This product was previously imported from Asia.
Vedoya concluded by stating that the question for Mexico is not whether it will miss a nearshoring opportunity.
Instead, the focus should be on how much the country can capitalize on this trend. Ternium’s strategy reflects a broader shift in Latin America’s approach to global steel competition.
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