Ternium to Invest US$1 Billion in Nuevo Leon
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Ternium to Invest US$1 Billion in Nuevo Leon

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María José Goytia By María José Goytia | Journalist and Industry Analyst - Wed, 03/02/2022 - 12:55

In an effort to increase its product portfolio, Ternium will invest US$1 billion in its Peaqueria, Nuevo Leon plant. The new investment program seeks to serve the automotive, renewable energy, construction, agriculture and home appliances industries.

The investment will enable the expansion of Ternium’s production capacity for advanced high-strength and ultra-high-strength steels toward the first half of 2024. The project includes the development of a new cold rolling mill, a hot-dip galvanizing line, a push-pull pickling line and new finishing lines. The steel company operates in Mexico, Brazil, Argentina, Colombia, the US and Central America, although Mexico is its most relevant market.

Máximo Vedoya, CEO, Ternium, said these initiatives are consistent with the company’s strategy of continuously optimizing its industrial system to capture future market opportunities. "We believe this new investment program will strengthen Ternium's competitive positioning, allowing us to substitute imports in the Mexican market to better serve our customers with a broader and more technologically advanced product portfolio," he said.

The announcement comes after Ternium’s 4Q21 numbers showed a decrease in sales. During this period, the company’s shipments amounted to 2.8 million tons, 8 percent less than in 4Q20. Ternium’s shipments in Mexico fell more than expected during 4Q21 due to supply chain constraints and a shortage of semiconductors for vehicle manufacturing, since the automotive sector accounts for 25 percent of its sales volume.

However, Ternium’s profitability remains promising: it gained US$4.3 billion in revenue in 2021, which was a sharp increase compared to a revenue of US$867 million over 2020. Pablo Daniel Brizzio, Ternium COO, said he expects finished steel shipments in the region to further increase during 1Q22.

At his morning press conference, President López Obrador mentioned Ternium’s investment as a positive case study of Mexico’s potential to attract capital. Days before, Paolo Rocca, General Manager Mexico, Ternium visited the president and shared the company’s intention to further invest in Pesqueria. “According to Ternium’s market studies, it sees a promising future in the economic and commercial aspects of Mexico,” the president expressed when highlighting his optimism. Since 2013, Ternium has invested a total of US$3.54 billion in its Pesqueria industrial complex.

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