26 September 2007 Bekaert consolidates its activities in Venezuela and Colombia
Today Bekaert has signed an agreement with Siderurgica Venezolana Sivensa S.A. for the acquisition of 50.002% of the shares in Vicson, S.A. resulting in full ownership for Bekaert. The purchase price related to this transaction amounts to US$ 35.5 million (€ 25.4 million).
Vicson, S.A., which is located in Valencia (Venezuela), manufactures wire products for industrial, construction and agricultural applications. The company staffs 650 employees. With an annual production capacity of about 100 000 metric tons, Vicson records annual sales of
€ 100 million.
Hereby Bekaert also indirectly acquires a majority interest in the joint venture Productora de Alambres Colombianos S.A. - Proalco S.A. in which Vicson, S.A. has a 75% share. Combined with the 12.5% share that Bekaert holds through its joint venture in Ecuador, Bekaert becomes a 87.5% shareholder of Proalco S.A. This company staffs 340 employees and posts annual sales of € 50 million. Proalco produces similar wire products for the Colombian market.
Both parties anticipate a timely closing of the transaction.
Oscar Augusto Machado Koeneke, President of Sivensa, commented: “We have come to a good agreement with our longstanding partner Bekaert on the sale of our share in Vicson, S.A. This decision is fully in line with Sivensa’s business strategy to concentrate on the hot briquetted iron and steel businesses, in which the company has steadily grown in recent years.”
Bert De Graeve, Chief Executive Officer of Bekaert, stated: “Latin America is for Bekaert a growth market which is in full development. This agreement is important as it allows us to strengthen our strategic positions in Venezuela and Colombia.”
Henri-Jean Velge, Group Executive Vice President of Bekaert, commented: “Along with our local management we will pursue our business strategy in order to offer our customers in this region high quality products and to further support the economic growth of both countries. We will also maintain the good relationships we built up with Sivensa throughout the years.”
Bekaert’s activities in Latin America go back to 1950. Today they represent about one third of combined sales by means of successful joint ventures in Brazil, Chile, Colombia, Ecuador, Peru and Venezuela. As a worldwide market leader in advanced wire products Bekaert substantially contributes to the success of these companies thanks to its technological expertise and operational excellence. Bekaert will support its positions on the various Latin American markets to a maximum extent and will follow up on potential opportunities which contribute to strengthening the company’s strategic position.
Appendix: Bekaert in Latin America
History - Milestones
1950 Activities take off in Santiago (Chile) where Bekaert builds a steel wire plant with a Chilean local partner
1956 Inchalam S.A.: Greenfield investment in Talcahuano (Chile).
1968-69 Bekaert enters the Venezuelan market, taking a stake in a steel wire processing company, Vicson, S.A., together with the Venezuelan steel manufacturer Sivensa.
1969-70 Vicson, S.A. moves to the new industrial site of Valencia (Venezuela) with a greenfield investment in steel wires.
1972 Bekaert starts a new factory in Ecuador and enters the Peruvian market.
1975 Set up of the joint venture BMB-Belgo Mineira Bekaert Artefados de Arame Ltda in Vespasiano (Brazil) in which Bekaert has a 40% interest. 2 years later steel cord production is started at this plant.
1989 Start of Bekaert’s rope activities in Venezuela.
1992 Vicson, S.A. locates all its ropes and fences activities in the purchased plant in San Joaquin (Venezuela).
1994 Bekaert further extends its steel wire activities taking an acquisition in Chile.
1996 Bekaert enters the Colombian market through a joint venture with Productora de Alambres Colombianos S.A. - Proalco S.A.
1997 Acquisition in the wire sector of Brazil with a 45% participation in Companhia Siderurgica Belgo Mineira. Later, this joint venture will be named Belgo Bekaert Arames Ltda.
Bekaert in Latin America today
Bekaert is active in Brazil, Chile, Peru, Ecuador, Colombia and Venezuela via joint ventures with local partners, the largest of which is based in Brazil. By consolidating its activities in Venezuela and Colombia, Bekaert further strengthens its position in this region.
Latin America has attractive growth potential, with per capita steel consumption of only about a fifth of that in Western Europe. Most countries of Latin America had a good year in 2006, taking advantage of a positive economic climate.
Today Bekaert employs 5 500 people in Latin America. With € 1 113 million annual sales
Latin America contributed 35% to the combined sales of Bekaert in 2006.