Summary of Proposed Investment
Project Number
25956
Company Name
Armco do Brasil S/A.
Date SPI Disclosed
Apr 18, 2008
Country
Brazil
Industry
Manufacturing
Projected Board Date
May 19, 2008
Status
Completed
Sector
Re-Rolling and Drawing of Purchased Steel
Department
Regional Industry MAS LAC & EUR
Environmental Category
B - Limited
Previous Events
Approved : Jun 23, 2008
Signed : Jun 26, 2008
Invested : Sep 25, 2008
Project Description
Headquartered in the city of Sao Paulo, Armco do Brasil S.A (Armco or the company) is a mid-sized manufacturer of steel products, such as coated and re-rolled steel; low-, medium- and high-carbon steel alloys; galvanized and stainless steel.
In 1900, The American Rolling Mill Company was founded in the USA, establishing a commercial office in Rio de Janeiro in 1913. In 1993, all subsidiaries outside the US were sold, including the Brazilian units. In that year, through a management buy-out operation, Armco do Brasil S.A. became 100%-owned by its key managers. Armco is owned by Mr. Gilberto Fedi, Mr. Levon Kessadjikian, and Mr. Roberto Gallo, who are all well-reputed in the Brazilian business community. Armco’s headquarters and principal site is in Vila Prudente, near Sao Paulo city. The company also operates two smaller service center sites in São Bernardo do Campo and Vila Nova Plant as well as a plant in the free trade zone of Manaus, providing metal parts for the motorcycle and other industries in the region.
Armco produces:
- steel with high strength low alloy (auto parts, items for passive safety, and parts for bicycles, motorcycles and tubes);
- flat wire (umbrella frame stock, lumbar supports, flexible hoses and furniture hinge spring);
- high speed steel (jigsaws, hacksaws, power saws, circular saws, pump vanes, tissue cutting knives and textile knives);
- high carbon (springs, horn diaphragms, bicycle, agricultural and industrial chains, shoe reinforcement / toe caps, tire scraper blades and machetes among others);
- high carbon hardened & tempered (measuring tapes, hacksaws, springs, elevator contact strips, knives and other);
- stainless steel (turbine buckets, industrial knives, dental equipment, hinges, electronic contacts, flexible cables, electrical appliances and hypodermic needles);
- pre-coated, steel mill (auto parts, electric components, automotive industry, white goods panels and fuel tanks),
- pre coated, cold rolled (electro-electronic components, hardware, home appliances, alkaline batteries, automotive components, decorative parts and tubing); and
- low carbon (auto parts, electronic components, coins, broom handles, bicycle and motorcycle parts).
The company exports 5 to 7% of the steels produced to Latin America, USA, Mexico, Australia, Iran, Thailand, South Africa, Germany, England and Italy.
The project consists of the installation of a new plant at the edge of Jacareí, about 80km from Sao Paulo city. The new plant will modernize and upgrade Armco’s production capabilities, most notably giving it capacity to process 20kg/mm steel coils whereas it is currently has capacity for only 10kg/mm coils, increasing efficiencies. The project will be implemented in 2008-2009 and is estimated to cost $68 million equivalent. The primary investments include:
- 31 ha of land,
- civil works and erection of about 55,000m2 of production and warehouse facilities,
- acquisition and installation of state of the art equipment; and
renovating existing equipment. IFC is considering extending a loan of approximately $25 million to fund the project.
In 1900, The American Rolling Mill Company was founded in the USA, establishing a commercial office in Rio de Janeiro in 1913. In 1993, all subsidiaries outside the US were sold, including the Brazilian units. In that year, through a management buy-out operation, Armco do Brasil S.A. became 100%-owned by its key managers. Armco is owned by Mr. Gilberto Fedi, Mr. Levon Kessadjikian, and Mr. Roberto Gallo, who are all well-reputed in the Brazilian business community. Armco’s headquarters and principal site is in Vila Prudente, near Sao Paulo city. The company also operates two smaller service center sites in São Bernardo do Campo and Vila Nova Plant as well as a plant in the free trade zone of Manaus, providing metal parts for the motorcycle and other industries in the region.
Armco produces:
- steel with high strength low alloy (auto parts, items for passive safety, and parts for bicycles, motorcycles and tubes);
- flat wire (umbrella frame stock, lumbar supports, flexible hoses and furniture hinge spring);
- high speed steel (jigsaws, hacksaws, power saws, circular saws, pump vanes, tissue cutting knives and textile knives);
- high carbon (springs, horn diaphragms, bicycle, agricultural and industrial chains, shoe reinforcement / toe caps, tire scraper blades and machetes among others);
- high carbon hardened & tempered (measuring tapes, hacksaws, springs, elevator contact strips, knives and other);
- stainless steel (turbine buckets, industrial knives, dental equipment, hinges, electronic contacts, flexible cables, electrical appliances and hypodermic needles);
- pre-coated, steel mill (auto parts, electric components, automotive industry, white goods panels and fuel tanks),
- pre coated, cold rolled (electro-electronic components, hardware, home appliances, alkaline batteries, automotive components, decorative parts and tubing); and
- low carbon (auto parts, electronic components, coins, broom handles, bicycle and motorcycle parts).
The company exports 5 to 7% of the steels produced to Latin America, USA, Mexico, Australia, Iran, Thailand, South Africa, Germany, England and Italy.
The project consists of the installation of a new plant at the edge of Jacareí, about 80km from Sao Paulo city. The new plant will modernize and upgrade Armco’s production capabilities, most notably giving it capacity to process 20kg/mm steel coils whereas it is currently has capacity for only 10kg/mm coils, increasing efficiencies. The project will be implemented in 2008-2009 and is estimated to cost $68 million equivalent. The primary investments include:
- 31 ha of land,
- civil works and erection of about 55,000m2 of production and warehouse facilities,
- acquisition and installation of state of the art equipment; and
renovating existing equipment. IFC is considering extending a loan of approximately $25 million to fund the project.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Narciso Fabri, CFO
Rua Zacarias Alves de Melo, 180 – Vila Prudente
Sao Paulo – SP – Brazil
Telephone: (55 11) 6343-2876
Fax: (55 11) 6343-2877
E-mail: narcisofabri@armco.com.br
Website: www.armco.com.br
Rua Zacarias Alves de Melo, 180 – Vila Prudente
Sao Paulo – SP – Brazil
Telephone: (55 11) 6343-2876
Fax: (55 11) 6343-2877
E-mail: narcisofabri@armco.com.br
Website: www.armco.com.br
For Inquiries and Comments About IFC, Contact
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster
Local Access of Project Documentation
Project documentation will be made available at the following locations:
All sites publicize a contact number, to be used in the event of a grievance or complaint on their websites.
Armco headquarters – Vila Prudente
Rua Zacarias Alves de Melo, 180 – Vila Prudente
Sao Paulo – SP – Brazil
Jacareí site [in the gate house]
Av. Humberto de Alencar Castelo Branco,Pres, 2705, Jd Siesta
Jacareí – SP – Brazil
All sites publicize a contact number, to be used in the event of a grievance or complaint on their websites.
Armco headquarters – Vila Prudente
Rua Zacarias Alves de Melo, 180 – Vila Prudente
Sao Paulo – SP – Brazil
Jacareí site [in the gate house]
Av. Humberto de Alencar Castelo Branco,Pres, 2705, Jd Siesta
Jacareí – SP – Brazil