Argentine-Italian engineering and steel group Techint, owner of Luxembourg-based steel tube maker Tenaris (NYSE: TS) and flat steelmaker Ternium (NYSE: TX), plans to invest roughly US$6.95bn in Mexico in projects over the next five years, according to a statement from the Mexican president's office.
Ternium will spend US$4.20bn in Nueva León state to build a 2Mt/y rolled steel plant, while local unit TenarisTamsa will carry out a US$1.60bn expansion to its seamless steel pipe plant in Veracruz state to bring output to 450,000t/y starting in 2011.
As a result, the plant will become the largest seamless steel pipe production center in the world, Mexican President Felipe Calderón said in a speech announcing the investments.
The investment will be financed with TenarisTamsa's own cash flow, a source at the company told BNamericas.
The plans also include investment of US$1.15bn in an iron ore and pelletizing project by Techint's Ternium Minería division for the states of Michoacán, Colima and Jalisco, according to the statement.
Techint president Paolo Rocca said the investment is an indication of the group's long-term confidence in Mexico's economy in spite of the present state of the global financial markets.
Techint was founded in 1945 in Argentina. Ternium is the Southern Cone country's largest steel company and one of the largest in Latin America.
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