BRUSSELS—Steel products group Bekaert does not see potential for recovery at its Rubber Reinforcement business in Brazil during the second half of 2020, Chief Finanical Officers Taoufiq Boussaid told analysts in a first-half results call. The country, he noted, was hit particularly hard by the COVID-19 pandemic.
This follows a sharp slowdown in demand for its products there in the first six months of 2020, with some analysts reporting second-quarter volumes tracking 60 percent lower than in the same period a year ago.
Assessing the impact of the pandemic on its Rubber Reinforcement unit in Brazil, Boussaid said order activity was impacted particularly by COVID-19-related stoppages in the construction sector—a major user of off-road tires and materials-handling equipment.
"Unfortunately, as it stands now, for the second half, we don't see a major improvement or stabilization coming out of Brazil," Boussaid said on the Aug. 1 call from Bekaert's Brussels headquarters.
Bekaert operates three plants in Brazil through a 55.5 percent-owned joint venture with ArcelorMittal, called Belgo Mineira Bekaert Artefatos de Arame Ltda (BMB).
In 2018, BMB launched a three-year expansion plan in a bid to gain current market-share in the region. Projects included a $33 million investment at its Itauna plant in Minas Gerais, increasing steel tire cord capacity by 35 percent.