ArcelorMittal (MT) announced that its unit ArcelorMittal Zenica is investing €4.65 million (around $5.4 million) to further expand its production facilities. Once the project is complete, the new facilities will produce high density coils of re-inforcement bars (rebar) which will considerably reduce the cost of finishing.
The production of rebar in coil in the Balkan region will increase the market share of ArcelorMittal Zenica in southeast Europe and also extend its product range. Also AreclorMittal Zenica will be the sole producer of rebar in coil in the Balkan region. Machinery will be installed by one of the world’s leading specialists in steel production machinery, SMS Group.
According to ArcelorMittal, the addition of the oil production to its capability will strengthen the company’s position as the leading steel producer in the Balkans and also provide a strong competitive edge as it will offer higher quality and better service.
Also, this is an example of the company’s commitment toward building a long term, sustainable future for steelmaking in Zenica. This project will be a cost effective one and provide considerable opportunities for local businesses and the entire local community.
ArcelorMittal posted healthy third-quarter 2014 results in November. The company reported net income of $22 million or a penny per share in third-quarter 2014 as against a loss of $193 million or 12 cents per share in the year-ago quarter.
Revenues went up 2.2% year over year to $20.1 billion in the reported quarter owing to increased steel shipments and higher marketable iron ore shipments. Total shipments rose 3.9% year over year to 21.5 million metric tons in the quarter.
ArcelorMittal expects earnings before interest, taxes, depreciation and amortization (EBITDA) in excess of $7 billion for 2014. However, the steel industry is still affected by overcapacity. The tough pricing environment remains another concern.
ArcelorMittal currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the steel industry include LB Foster Co. (FSTR), Mechel OAO (MTL) and Commercial Metals Co. (CMC), all carrying a Zacks Rank #2 (Buy).
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