Flávio Roberto Azevedo, President of V&M do Brasil, takes office during the 1st National Steel Meeting.

The new President of the Brazilian Steel Institute (IBS), Flávio Roberto Azevedo, took office last Tuesday (June 3rd), during the 1st National Steel Meeting at Sofitel Hotel, Rio de Janeiro. Azevedo, who is also President of V&M do Brasil, a company within French group Vallourec, took over the position previously occupied by former Usiminas/Cosipa President, Rinaldo Campos Soares, who had been IBS President since May, 2007. During his inauguration speech, Azevedo reassured the commitment towards meeting the increasing domestic demand.

" The Brazilian steel industry is firmly committed to maintaining the domestic market fully supplied with steel produced in the Country with quality and prices compatible with global competition requirements. The scenario forecast is of full capacity to supply the domestic market and significantly increasing exportation.", said the new President.

Azevedo also mentioned the interest in cementing partnership relationships with clients in the various production chains in which the steel industry is involved. "The market does not consume steel directly, but steel-containing products. Therefore, it becomes clear that the competitiveness of the companies comprising those chains is a basic condition for sustaining the market for various steel products", he added.

Exports - The new President of IBS pointed out that the Brazilian steel industry regularly exports more than 40% of its production, standing among the sectors providing the largest contribution to the Country's trade balances, a position which should improve over the next years. In order to enhance the growth of indirect exports of steel-intensive products of higher added value, manufactured by the mechanical transformation industry, Azevedo said it will be necessary to have "support from the government to reduce or eliminate bottlenecks and inefficiencies limiting the system's competitiveness and its better insertion in the international market".

Investments - Azevedo pointed out that the steel sector is doing its part. According to him, the companies in the Country's installed park are not only seeking improvements in competitiveness but are also developing investment programs amounting to US$ 27.1 billion to increase production capacity from the current 41 million t to around 56.3 million t of crude steel by 2013. These projects are basically aimed at supplying domestic demand. At the same time, new companies are established and new projects are developed, mostly for exportation of semi-finished products.

Together, ongoing and announced projects for production of semi-finished goods for exportation to be implemented in Brazil involve an additional production capacity of 24.3 million t of crude steel and investments estimated at US$ 18.6 billion for the 2009-2015 period. The conclusion of ongoing projects and the development of those being studied should increase the Country's steel production installed capacity to around 83.3 million t between 2015 and 2016.

" The conclusion of this process will lift Brazil to a major position in the new arrangement evolving in the world's steel industry, of placing basic production of steel in countries presenting comparative advantages for the supply of raw materials, with final transformation operations taking place at units closer to consumers. This is a model that should prosper over the next years companies rationalize their operations and reduce their production costs. At the same time, it promotes development and adds value to exports of countries nestling projects of such nature", he added.

Consuming Sectors - Azevedo made a short analysis of the positive growth perspectives for consuming sectors, which have ambitious investment plans to meet the demands forecast. He mentioned projects announced by the oil and gas, shipbuilding, automotive, capital goods and civil construction industries which, together, account for the 84% of the Country's demand for steel.

The new President of the IBS also pointed out the Government's structured efforts for supporting the industry's growth and increased competitiveness. He mentioned the PAC, the PROMINP and the newly-launched Productive Development Plan, which means to provide benefits to 25 sectors, mainly through tax relief, tax and financial incentives and by tackling bureaucracy.

Political Reforms - Azevedo said it is important to acknowledge the positive effects of the programs undertaken by the Federal Government, but it must also be said that they may not suffice to ensure long-term sustainable development. In order to accomplish this, he said, the Country needs a set of deeper systemic measures, which will not be achieved unless structural reforms are implemented, specially, in the economic field, the labor and tax reforms.

" These are complex actions, difficult to approve and to implement, but that must be addressed immediately, enjoying the favorable economic scenario. You must fix your roof when it's sunny", he said, mentioned a popular saying. Azevedo mentioned the necessity for other measures contributing to the reinforced growth and to an improved atmosphere for investments in the Country, such as a stricter tax policy allowing the reduction of interest rates, and a better definition of the role of regulating agencies so as to provide more attractiveness and security for investments in critical infrastructure sectors.

The new President of IBS also spoke about the big responsibility of receiving the position from Rinaldo Campos Soares. " With his broad experience in the steel industry and renowned competence and skillfulness, proven during his activities at USIMINAS as well as at several other companies and associations, including two terms as President of the IBS, Rinaldo leaves the Institute with a legacy of highly important accomplishments for the development of the sector. Continuing his work will be one of our priorities", Azevedo said.