Voestalpine to Build Two Track Switch Plants in Brazil

Voestalpine AG (VOE), Austria’s biggest steelmaker, plans to build two plants for rail-track switches in Brazil this year to gain as the country prepares to host the soccer World Cup and the Olympic Games.

The plants will be located in Sao Paulo and in Sao Luis and are being built together with local partners, according to a statement from the Linz-based company that confirmed a report in Der Standard newspaper earlier. The investment will be in the “two-digit-million-euro range,” Voestalpine said.

The steelmaker is increasing its presence in Brazil as the country boosts investment in infrastructure before the 2014 soccer tournament and Olympics two years later. Rio de Janeiro and Sao Paulo plan new local transit systems, Voestalpine said, adding that Brazil-based Vale SA, the world’s largest iron-ore producer, is building a new heavy duty train route.

Voestalpine will “take advantage of the positive development by expanding in Brazil in the coming years,” Franz Kainersdorfer, who heads the rail unit, said in the statement. The plant in Sao Luis, in the north of the country, has already won a 40 million-euro ($53 million) order from a “leading global commodities company,” Voestalpine said.

The steelmaker has 16 plants in Brazil, which accounted for 4 percent of total revenue in fiscal 2011, according to its annual report.

Outside of Europe

“New capacity is unlikely to be built in Europe, but rather in growth regions,” Chief Executive Officer Wolfgang Eder said in the statement. “Europe is continuously calling into question its status as a center for industry.”

Eder, who heads Eurofer, the trade association of European steel producers, has repeatedly criticized the European Union’s carbon permit plans, saying they make EU steelmakers less competitive.

Voestalpine said last month that it was building car-part plants in China and the U.S. after winning a 700 million-euro order from a “leading European car maker.”

The company’s train business also plans to invest in Turkey and Saudi Arabia and may make a “bigger acquisition” through its Profilform unit, Standard said today, without saying where it got the information.

Voestalpine wants to get 50 percent of its sales from outside of Europe by the end of the decade, up from 22 percent now, the paper said.

To contact the reporter on this story: Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net

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