The CEO of the Mexican unit of the giant Latin American steel group Techint, Ternium, Máximo Vedoya, said that his multimillion-dollar investment of $8.0 billion in Mexico will serve to “repel the Chinese steel threat” in Latin America, according to a note from the Bloomberg news agency.
“No company in the world can compete with the Chinese state,” Vedoya said at a forum of businessmen organized by Bloomberg, in the northern city of Monterrey. “All countries are realizing they have to do something”.
Despite the flood of cheap steel from China to the world, Ternium maintains an investment plan in Mexico that involves $8.0 billion that among several projects, includes a new steel mill with an annual capacity of 2.6 million metric tons (mt) of slab per year.
Ternium’s investment plan in Mexico was $6.8 billion, but last August, the company reported that it notified the outgoing Mexican president and then-president-elect Claudia Sheinbaum (now president) that they would increase their investments in the country, to reach $8.0 billion, as reported at the time by SteelOrbis.
In addition, according to the specialized website Reportacero.com, Ternium’s new steel mill will be the first in the world to use the combination of electric arc furnace (EAF) and direct reduction iron (DRI) plant to produce steel for the automotive industry.
According to Bloomberg, Vedoya said that there must be clear rules for private investment and infrastructure spending to take advantage of demand. “The government has to say where it wants the private sector to be and where it does not,” Vedoya said onstage at the Bloomberg event, noting that power generation and infrastructure projects represent big opportunities for investment. Sheinbaum's administration should work to invest in renewable energy and lower power costs through the work of state utility Federal Electricity Commission, he said.
Mexico should also improve highways and railways to facilitate export, and better border cross points to the US, he said.
Vedoya said he was optimistic about Sheinbaum's transition to power and that nearshoring will proceed regardless of who wins the US presidential election next month. He said it was too early to tell how Sheinbaum's political reforms would affect the business climate.