The Latin American flat and long steel producing unit of the Italian-Argentine Techint Group, Ternium, is poised to undertake the largest capital expenditure in its history, with an investment ranging from $4.0 billion to $4.1 billion in 2024 and 2025. This ambitious financial commitment aims to complete one of Ternium's most significant projects in Mexico, as disclosed by company executives, including CEO Máximo Vedoya, during a recent investor meeting. The scale of this investment underscores Ternium's strategic focus on expanding its operations and enhancing its production capabilities in the region.
During the presentation, Vedoya outlined that the total capital expenditure for the company would be approximately $2.3 billion, which also includes investments in Usiminas, another steel producer in Brazil. A substantial portion of this budget is earmarked for the ongoing Pesquería project. Vedoya emphasized that 2025 is expected to be a landmark year for CapEx in Ternium's history, primarily driven by developments at the Pesquería facility. This project is crucial for Ternium's growth strategy and aims to significantly boost its production capacity in the competitive steel market.
The Pesquería project, located in the northern city of Pesquería in Nuevo León, Mexico, is set to include a new steel mill capable of producing 2.6 million metric tons (mt) of steel annually. This ambitious undertaking is part of the third phase of the Ternium Industrial Center, which has been designed to enhance the company's operational efficiency and reduce reliance on external suppliers. As part of this expansion, Ternium has already begun operations on its pickling line, which boasts a capacity of 550,000 mt per year, and three of the five lines in the new finishing center have commenced operations, with plans to fully operationalize the facility in the coming months.
Currently, the Pesquería facility has the capacity to produce 310,000 mt per year of customized steel products. Ternium is actively working to ramp up production, with plans to start operating the remaining two lines in the finishing center within the next two months. This swift progress highlights Ternium's commitment to enhancing its production capabilities and meeting the growing demand for steel in various sectors, including construction and automotive manufacturing.
In addition to the pickling and finishing lines, Ternium is making steady advancements on its galvanizing line, which will have a capacity of 600,000 mt per year, and a cold rolling mill with a capacity of 1.6 million mt per year. The company anticipates commencing operations for these facilities at the end of 2025 and the beginning of 2026. These investments are expected to significantly improve Ternium's operational efficiency, allowing the company to produce higher-quality steel products while minimizing costs associated with external sourcing.
Ternium's strategic investments in Mexico are not only aimed at enhancing production capacity but also at improving profit margins. Vedoya noted that the completion of these projects would lead to substantial cost savings and increased operational efficiency. By reducing dependency on external suppliers, Ternium can streamline its supply chain, respond more swiftly to market demands, and ultimately strengthen its competitive position in the steel industry.
