ArcelorMittal is to resume an expansion project at its Vega facility in Sao Francisco do Sul in the state of Santa Catarina, Brazil. The steelmaker is planning a US$330 million investment that will see the construction of a new continuous annealing line and a third galvanising line for the production of cold rolled and galvanised products. The plant will increase its annual production capacity by 700kt/yr, bringing the total to 2.1Mt/yr. Production is expected to begin in 2021.

According to ArcelorMittal, the project will increase production for the automotive, construction and home appliances sectors at the Vega unit, ‘allowing the company to meet the market expectations and provide high strength and quality steel products’.

Benjamin Baptista Filho, president of ArcelorMittal Brazil and CEO of ArcelorMittal Flat Carbon South America, said: “We expect the automotive industry to have a substantial increase in the utilisation. At the outset of the crisis, automakers were practically operating to serve the Brazilian and Argentinian markets only. The crisis forced automakers to develop alternative markets.”

The global crisis of 2009, the Brazilian recession and the reduction of Brazil’s domestic market for vehicles, forced ArcelorMittal to put thoughts of expansion at Vega on hold until 2011. Today, it is claimed that 50% of the plant’s production today is aimed at the automotive marketplace.

“We currently have a market to sell Vega’s products above the existing capacity. We could be selling more,” said Filho.