Steel Mills

Tenigal Galvanizing Plant Starts Production in Mexico

September 19, 2013

Nippon Steel & Sumitomo Metal Corp. and Ternium SA announced the start-up of its joint venture steel operation, Tenigal, near Monterrey City, Mexico on Sept. 18. Tenigal is part of Ternium’s Pesqueria Project, a $1.1 billion steel complex that includes a cold-rolling plant with a 1.5 million ton annual capacity.

Tenigal will produce automotive hot-dip galvanized and galvannealed steel sheet, including outer panels and high strength steels. The $300 million galvanizing line will be capable of producing 400,000 tons per year. Tenigal features a state-of-the-art continuous hot-dip galvanizing and galvanneal line that rivals NSSMC’s latest facility in Japan. The plant will boost Mexico’s ability to produce its own galvanized automotive grade metal that typically is imported from the U.S. and other countries.

“Thanks to the joint venture with Nippon Steel, Pesquería Plant will be provided with the most sophisticated steel technology, complying with the highest standards required by the automotive industry worldwide,” said Ternium CEO Maximo Vedoya in a visit to the site last month. “There will be a decoil line connected to a Tándem cold mill, and a continuous galvanizing line. The plant will produce 1.5 million tons per year, which nowadays are being imported, so this shall contribute to Mexican industries competitiveness.”

Tenigal is expected to be a major supplier to the Mexican auto industry. In August, dealers in Mexico sold 88,325 new light vehicles, up from 86,579 in July and 83,204 in August 2012. The Mexican Automobile Industry Association forecasts industry growth of 40 percent to 4 million vehicles by 2017. In response the Mexican steel industry plans to invest $11 billion over the next four years to meet demand.

The opening of the mill complex comes at an opportune time since the Mexican government is cracking down on unfair steel imports to the country and proposing hefty tariffs on steel from South Korea and Russia. Import of steel to Mexico surged 36 percent in 2012 to a record 9.6 million tons according to the National Iron and Steel Industry Chamber.

Operations at Tenigal will be headed by President Cesar Jimenez and Masanori Shimada, director and member of the board. Ternium will own 51 percent of the new facility and NSSMC 49 percent. The plant employs approximately 140 workers; the Pesqueria complex will employ a total of 600 workers.