Latin America: Steel

From one of the great open-hearth furnaces poured a molten white stream—steel. The rolling mill clanked out the first structural shapes. A white-clad band struck up the national anthem. The Volta Redonda steel plant (not far from Rio de Janeiro), the most impressive industrial sight in Latin America, was officially in operation. Brazil’s dream of industrial self-sufficiency was being realized.

Up at the neat little company hotel, President Eurico Caspar Dutra, Cabinet ministers and newsmen toasted the man who had made the dream come true, Engineer Macedo Soares. Said Engineer Scares: until Volta Redonda became a reality, Brazil had been tied to an agricultural economy. From now on, Brazil would have a basic industry which would make her economically independent, raise living standards, strengthen her defenses. The guests raised their glasses to “the greatness of Brazil.”

In the sere valley below, waves of sulphur rolled out every six hours, as a blast furnace belched. Black smoke poured from the stacks. A 300-ft.-high gas tank (big enough to supply Rio’s daily gas consumption ten times over) loomed up by the long sheds that make up the rolling mill.

On the nearby hills, a new, shadeless city of 33,000 people spread itself—the Portuguese-style manor house of Engineer Soares, the well-equipped homes of the 45 U.S. technicians who directed the mill’s construction, 2,800 two-family workers’ cottages, complete with wooden floors and bathrooms.

Pros & Cons. Shining, new $100 million Volta Redonda ($45 million came from the U.S. Export-Import Bank) still had plenty of “ifs” to it. Important production will not get under way before early next year, and the full output of 750,000 tons of steel per year will not be reached until even later. Volta Redonda’s critics claim that the plant is badly placed, that the output will be high-cost. Iron ore must travel south from the rich Minas Geraes deposits over a rickety railroad. Coal comes north from the Santa Catarina mines by an inefficient ship & rail combination.

But Soares has his answers: Volta Redonda’s location, halfway between the port of Rio and industrial Sao Paulo, is ideal for distribution. The Paraiba River furnishes an ideal water supply. Limestone (a necessity in steelmaking) is mined near by. In time, Soares expects subsidiary industries to grow up around Volta Redonda, turn it into a Brazilian Pittsburgh.

Could Volta Redonda compete with foreign steel? “Right now,” said Soares, “we may need some kind of tariff protection. But in three years, when new ovens and converters are in operation and we are going full blast, we can compete in Brazil with foreign importations.” Soares even has fond hopes of some day selling alloy steels abroad. “Volta Redonda,” he says, “is the product of the collective will that will overcome all obstacles.”