Voestalpine remains committed to factories in Mexico

Austrian iron and steel group Voestalpine lowered its economic performance in the first nine months of fiscal 2016/17, but CEO Wolfgang Eder said he is confident the company is able to catch up in the fourth quarter and achieve annual targets at the end of the fiscal year in March 2017. ...

Commodity prices fell and stabilized, at least temporarily, he said during a conference call. In addition, in addition to steel prices, there is a slow improvement in the oil and gas sector. The growth drivers are in the automotive and consumer goods sectors. Eder reiterated his full-year forecast for fiscal year adjusted earnings (EBITDA) of € 1.45 billion and operating profit (EBIT) close to € 814 million in the prior year.

Eder reaffirmed his commitment to a plant in Mexico, despite plans by the new US president to impose high import duties. "We are following developments in the United States, but at the moment we see no reason to revise the investment plans for an automotive component plant in Mexico."

In addition, only one-third of production is destined for export to the United States and two-thirds for other countries. For many years Voestalpine established a manufacturing base there due to the low labor costs in Mexico. However, a lot will depend on what US President Donald Trump's plans really are.