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CLE Vega do Sul (Arcelor) - São Francisco do Sul, Brazil

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For this green field project in Brazil, the Arcelor Group was seeking a partner to design, build, finance and operate (DBFO) the site's multi-utility and environmental services facility.

The client

The Arcelor group, created by the merger of Aceralia, Arbed & Usinor, develops its activities in four core businesses: Flat Carbon Steel, Long carbon Steel, Stainless Steel and theDistribution, Transformation and Trading sector.

VEGA do Sul is a new cold rolling mill in Brazil, located in São Francisco do Sul in the sate of Santa Catarina. Housed in an area of approximately 2.2 million square meters, and employing a staff of 300, the facility operates state-of-the artpickling, cold rolling and galvanization units and supplies steel coils to the automobile industry.

The plant became operational at the end of the first half of 2003, with an annual production of 880 thousand tons of pickled, cold rolled and galvanized steel.

The client's needs

For this green field project in Brazil, the Arcelor Group was seeking a partner to design, build, finance and operate (DBFO) the site's multi-utility and environmental services facility.

Through this partnership, Arcelor pursued the following goals:

  • ­Manage increasing pressure from environmental legislation and standards,
  • Control operating costs and ensure long term stability,
  • ­Focus capital expenditures on steel manufacturing rather than non core activities,
  • ­Optimise the site's environmental, health and safety performance.

CLE Brazil is ISO 9001, ISO 14001 and OHSAS 18001 certified.

Our solution

Veolia Water joined forces with Veolia Environment's energy services and solid waste management divisions, respectively Dalkia & Veolia Environmental Services, and with local companies, to form the special purpose subsidiary, CLE Brasil, that was retained by Arcelor for this 15 year DBFO project.

Project scope includes:

  • Potable water supply 15 m3/h
  • Industrial water production 250 m3/h
  • Demineralised water production 75 m3/h
  • Cooling demineralised water production 60 000 th/h
  • Superheated water production 28 000 th/h
  • Waste water production 40 m3/h
  • Compressed air production 12 000 Nm3/h
  • Natural gas supply 15 000 Nm3/h
  • Nitrogen production 9 500 Nm3/h
  • Hydrogen supply by trucks
  • Electricity distribution (230kV) 100 MW
  • Electricity distribution (13,8kV) 100 MW

Project construction lasted two years, with off balance sheet financing for Vega do Sul and Arcelor. It was completed in November 2002 and production reached nominal output in March 2004. Operations and maintenance of the multi-utility facilities are governed by a multi-service agreement between Vega do Sul and CLE Brazil.
CLE Brazil employs 60 staff and is ISO 9001, ISO 14001 and OHSAS 18001 certified.

Through this partnership with Veolia Environnement, Arcelor optimised technical innovation and value creation for the Vega do Sul project, while minimising the number of vendors and associated transaction costs.

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Signed in May 2002, the "Build, Own and Operate" contract is made up of :
construction/finance arrangements and additional operational services delivered over a 15 years term, providing all utilities, production, transformation and distribution services on site.