Máximo Vedoya
CEO
Ternium México
/
View from the Top

Steeling up for the Future

Thu, 09/01/2016 - 15:10

Q: How has Ternium’s Pesqueria plant advanced toward its production and participation goals within the automotive market?

A: The Ternium Industrial Center in Pesqueria is the most modern automated steel complex in Latin America. It was also the first plant in Mexico focused on high-spec steel mainly for the automotive industry. Nowadays, Ternium is the main steel supplier for this sector in the country. In 2010, our sales in the automotive industry represented 14 percent of our total income but they now add up to almost 22 percent. Ternium has a production capacity of 11 million tons and 62 percent of its sales are in Mexico. The company has invested US$2.5 billion in the past seven years and our goal is to keep growing at that rate, competing with imports coming from the US, Japan, Korea and Taiwan.

Q: What future investments does Ternium plan to introduce to Mexico to boost the company’s presence in the automotive market?

A: This year Ternium announced an investment of US$300 million in a new Tenigal steel galvanizing line in the Ternium Industrial Center. This will increase our possible annual production by 430,000 tons, resulting in a total installed capacity of 830,000 tons. We are also investing US$150 million in our plant in Churubusco, located in Monterrey. In 2016, we will also inaugurate the Roberto Rocca Technical School in Pesqueria, following a US$29 million investment. This academic center will be in charge of shaping the quality human talent that the industry’s growth demands.

Innovation is crucial for Ternium and we are developing 150 new projects, most of which are in collaboration with our industrial clients. Our bainitic steel, for example, is used in alloy rims and other components that require a high fatigue resistance, while die-cut pieces require our high-resistance, high-elastic ratio steel. Ternium’s hotrolled products result in a significant weight reduction for chassis components when compared to conventional steel parts. Similarly, Tenigal treated steel offers the same results for body components. Our new cooling table in the Churubusco plant has proven to be an excellent addition, widening our advanced, high-resistance steel portfolio with dual phase products, stronger bainitic solutions and complex-phase steel.

Q: How has the Ternium Industrial Center evolved in terms of technology development and integration?

A: The Ternium Industrial Center includes the Ternium coldrolled process and the Tenigal continuous galvanizing line, our zero-waste water treatment plant, our power station and our quality-testing laboratory. The center is home to a 99Ha ecological reserve, part of the total 437Ha terrain dedicated to the preservation of the natural habitat. This includes an ambitious rescue program for more than 17,500 plants and animals.

We are working on the Pesqueria Electricity Center, which will eventually supply energy to meet the entire country’s demand. This project is expected to be finished in the second half of 2016, after a total investment of US$1 billion.

Q: What is Ternium’s position regarding the growing aluminum trend in the automotive industry?

A: Steel offers several advantages over aluminum, especially its environmental benefits. Producing 1 ton of aluminum generates four times more emissions than 1 ton of steel. Therefore, though lighter, it pollutes more. At the moment, CO2 emission standards only consider the vehicle’s lifecycle. However, this vision must be broadened to include the materials involved in the production process and the possibility to recycle them.

Q: How have growing steel imports from China influenced Ternium’s sales in the domestic market?

A: Over the last few years, China’s overcapacity alongside that of other countries such as Korea, Taiwan and Russia have caused grave distortions in global markets. Prices do not reflect actual production costs. Mexico’s steel demand continues growing above the international rate. Unfortunately, this surge was met with imports arising from disloyal competition but the Ministry of Economy has done an excellent job limiting the impact on the national industry.