Valesul: a niche producer focused on the domestic market

摘要

Last July, Companhia Vale do Rio Docc (CVRD) purchased 45.5 percent of Valesul, an aluminium smelter located in the state of Rio de Janeiro. Brazil, for a consideration of 27.5 Million US dollars. Based on Valesul's shareholders agreement, CVRD exercised its right of first refusal and bought the stake of its partner, BHP Billiton; as a result, CVRD owns now 100 percent of Valesul. For that reason, it is seems to be an appropriate opportunity to examine Valesul's strategic positioning. Valesul started its operations in 1982 with a 86kt/y nominal capacity. In the beginning, it experienced troubles in -terms of imported alumina supply and unsatisfactory market conditions (the company was started at a time of depressed prices). These problems have now been totally overcome and the company's present performance is positive. In 1Q 2006, Valesul had net revenues of 58 million dollars and EBITDA of 8 million dollars; its gross debt as of March 2006 was equivalent to zero. BHP Billiton's decision to sell its stake in Valesul seems to have been related more to strategic issues rather than financial concerns.