Released on May 29, 2008

Automotive casting supplier Teksid do Brasil, Minas Gerais, Brazil, recently announced it will invest $108 million over the next two years to improve its existing iron metalcasting facility and plans to spend $30 million on a new aluminum casting plant.

The majority of the funds, $60 million, will be devoted to increasing production capacity at the company’s existing iron plant in Betim, Minas Gerais, Brazil. The facility currently produces 2.2 million engine blocks per year; it will increase to 3.4 million. Teksid’s total iron casting capacity will grow from 300,000 tons to 360,000 tons.

The Betim plant, which produces engine blocks, steering knuckles, cylinder heads, suspension and brake system parts, employs 3,766 and currently occupies 390,000 sq. m with a built and covered area of 119,000 sq. m.

Teksid reports that Brazilian demand for iron automotive castings grew by 13.1% in 2006, 27.7% in 2007 and is expected to grow by 35.4% in 2008. According to a Teksid spokesperson, that growth has prompted the investment in increased capacity. The company’s customers include Cummins, Fiat, Ford, FPT Powertrain Technologies, GM, MWM International, Renault, Scania, Toyota, Volkswagen and Volvo, and its parts are installed in almost 70% of the vehicles sold in Brazil.

In addition to the plant capacity investment, the company said it will spend $48 million on initiatives aimed at environmental protection and process improvement at the Betim facility. The company said it also has developed various projects aimed at benefiting needy families, children and adolescents.

Giuseppe Allievi, who spoke on behalf of the company, declined to offer details on the planned construction of a green field aluminum casting plant but indicated it would be focused on the production of aluminum cylinder heads.