ThyssenKrupp could set up steel processing in Brazil -report

Reuters

FRANKFURT, Oct 25 (Reuters) - Germany's ThyssenKrupp could seek a partner to set up steel processing inBrazil if it fails to sell its steel mill in the Latin Americancountry, the Wall Street Journal Deutschland reported, citingsources.

ThyssenKrupp has for more than a year been trying to offloadits Steel Americas business, comprising the steel slab-producingmill in Brazil and a rolling mill in Alabama.

The Brazil plant has the capacity to produce up to 5 milliontonnes of slab a year, part of which is sold to the Alabama millfor processing into flat products shipped mostly to carmakers.

A new processing plant in Brazil could take up the output ofslabs that ThyssenKrupp can no longer ship to its plant inAlabama if it finds a buyer for only the U.S. plant, the WSJDeutschland said.

ThyssenKrupp reiterated that it was in "far advanced" talkswith one bidder over the sale of both Steel Americas plants andaimed to strike a deal soon. It is also in talks with otherinterested parties, it said, without providing details.

ThyssenKrupp owns 73 percent of the plant in Brazil, calledCSA, while the rest belongs to Brazil's Vale.

A source familiar with the situation told Reuters last monththat ThyssenKrupp could give up trying to sell the plant inBrazil, having made no progress in sales negotiations withCompanhia Siderurgica Nacional (CSN).

A move to process CSA's slabs in Brazil rather than in theUnited States may also have further financial implications asBrasilia passed a series of tax breaks in 2005 that benefitedcompanies exporting at least 80 percent of their output.

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