Net revenues: R$ 2.5 bn
Adjusted EBITDA: R$ 545 mm
Social investment¹: R$ 2.1 mm
Company resources: R$ 2.1 mm
1Amount managed by the Votorantim Institute. It does not include additional resources for initiatives to combat COVID-19.
The COVID-19 pandemic led the governments of Argentina and Colombia—countries where Votorantim’s long steel operations, Acerbrag and Acerías Paz del Río, are respectively headquartered—to impose restrictions on the movement of people and production activities. This situation affected the behavior of the local economies and, consequently, Votorantim’s businesses in these locations. Together, the operations registered net revenues of R$ 2.5 billion, and adjusted EBITDA of R$ 545 million, 16% and 20% higher, respectively, compared to 2019.
In 2020, Argentina, which was already experiencing a challenging economic situation, registered a 10.5% drop in gross domestic product (GDP), a 37.9% exchange rate devaluation and 36.1% inflation. Due to the pandemic, Acerbrag’s production was interrupted for approximately 50 days, during which the company concentrated its efforts on initiatives to protect the health and well-being of its employees and its financial structure, with initiatives to reduce costs and reinforce liquidity. This immediate response ensured business stability and Acerbrag was able to benefit from the gradual recovery of the economy in the second half of the year. An increase in demand was followed by an increase in prices, which had a positive effect on the company’s results.
In Colombia, operations were partially halted for approximately 60 days. Faced with this situation, the company adopted measures to protect its cash flow. Despite a drop in sales in the country, contingency initiatives and the reopening of the market enabled Acerías Paz del Río to register better results than in 2019. Despite the pandemic, some of the projects scheduled by the company were maintained, including the operational stability and cost reduction project, which proceeded at a reduced pace with initiatives including general maintenance of the rolling mill and energy cogeneration. This set of activities resulted in the company’s best operational stability in the last four years, including record production of rolled steel between June and July.
Within the scope of social responsibility, in addition to initiatives to address the effects of the pandemic, other Acerbrag projects, aimed at education and health, were adapted to ensure continuity. In 2020, the Technical School was recognized by local authorities for maintaining, albeit remotely, 100% attendance in their professionalization activities. One of the highlights was the donation of a CT scanner to the San Luiz Municipal Hospital, in Bragado, which will continue to be used even after the pandemic.
At Acerías Paz del Río, in addition to the activities to address the health emergency, the company’s Social Foundation continued its internal volunteer program including initiatives to support education, leadership development and income generation. During the year, the company received recognition from the National Association of Entrepreneurs of Colombia for its support for technical training and formal employment, benefiting youth in the region where the company operates.
Regarding the management of the two companies, in addition to a change in the organizational structure—with Adailson Pompeu becoming Acerbrag’s CEO, in addition to his position on the Board of Directors of Acerías Paz del Río and his responsibility for the Long Steel business at Votorantim—there were important lessons learned in overcoming challenges. The need to reduce costs and protect cash highlighted the companies’ flexibility, even in stressful situations.
In addition to Acerbrag and Acerías Paz del Río, Votorantim holds a 15% stake in the long steel operations of ArcelorMittal Brasil.
