CVRD Acquires Ferteco

Apr 27, 2001, 01:00 ET from Companhia Vale do Rio Doce

    RIO DE JANEIRO, Brazil, April 27 /PRNewswire/ -- Companhia Vale do Rio
 Doce (NYSE:   RIO PR) (CVRD), the world's largest producer and exporter of iron
 ore, announces the acquisition of 100% of Ferteco Mineracao S.A. (Ferteco)
 from ThyssenKrupp Stahl AG (TKS), one of the leading European steel-making
 groups, for US$566 million.
 
     Business description
     Ferteco is a Brazilian company engaged in the mining and processing of
 iron ore, based in the state of Rio de Janeiro and wholly-owned by TKS. It is
 Brazil's third largest producer of iron ore, with a production capacity of 15
 million tonnes per year. It has mineable reserves of 263 million tonnes of
 hematite and itabirite ores, with a quality similar to the CVRD Southern
 System reserves.  It operates two open-pit iron ore mines, Fabrica and Feijao,
 and a 4.0-million-tonne-per-year pellet plant in the Iron Quadrangle region in
 the state of Minas Gerais.
     From 1996 to 2000, Ferteco's sales volume grew by 18.1% per year, reaching
 24.9 million tonnes last year. Ferteco's main market has been Europe and TKS
 is its largest customer, with 6 million tonnes of fines and pellets in 2000.
 In parallel with this transaction, CVRD and TKS negotiated a long-term iron
 ore supply agreement that will allow the sale of larger volumes of Brazilian
 iron ore.
 
     Logistics
     Ferteco owns 10.5% of the total capital of MRS Logistica S.A. (MRS), a
 Brazilian railroad company. MRS has 1,612 kilometers of tracks, linking the
 states of Rio de Janeiro, Sao Paulo and Minas Gerais, with an 80-million-tonne
 capacity.  Ferteco operates a marine terminal through its wholly-owned
 subsidiary, Companhia Portuaria Baia de Sepetiba S.A. (CPBS), in the port of
 Sepetiba, Rio de Janeiro.
     Ferteco is also a traditional customer of CVRD transportation services,
 having shipped 10 million tonnes of iron ore and pellets last year through the
 Vitoria a Minas railroad and the Port of Tubarao.
 
     Financials
     Ferteco's consolidated net revenues in 2000 reached US$417.0 million,
 generating an EBITDA of US$92.0 million and net earnings of US$39.8 million.
 As of December 31, 2000, Ferteco had a net debt of US$131.3 million.
 
     Synergies
     There are strong synergies to be explored. Its main sources are related to
 transportation services and the rationalization of mining. The exploration of
 such synergies will translate into lower costs, a larger supply of diversified
 and high quality products, and the extension of the useful life of an
 important global supplier of iron ore due to the availability of the huge CVRD
 reserves.
     The acquisition of Ferteco helps to support CVRD's commercial strategy of
 developing true partnership relations with its customers. Together with its
 capacity to supply large volumes of iron ore, CVRD is able to provide specific
 solutions and tailor-made products to each client thus allowing them to obtain
 substantial productivity gains.
     Therefore, thanks to its reliability and the development of a diversified
 portfolio of high quality products, CVRD global leadership in the iron ore
 market is highly beneficial to the steel industry.
     JP Morgan Chase acted as exclusive financial advisor to CVRD in this
 transaction.
 
 

SOURCE Companhia Vale do Rio Doce
    RIO DE JANEIRO, Brazil, April 27 /PRNewswire/ -- Companhia Vale do Rio
 Doce (NYSE:   RIO PR) (CVRD), the world's largest producer and exporter of iron
 ore, announces the acquisition of 100% of Ferteco Mineracao S.A. (Ferteco)
 from ThyssenKrupp Stahl AG (TKS), one of the leading European steel-making
 groups, for US$566 million.
 
     Business description
     Ferteco is a Brazilian company engaged in the mining and processing of
 iron ore, based in the state of Rio de Janeiro and wholly-owned by TKS. It is
 Brazil's third largest producer of iron ore, with a production capacity of 15
 million tonnes per year. It has mineable reserves of 263 million tonnes of
 hematite and itabirite ores, with a quality similar to the CVRD Southern
 System reserves.  It operates two open-pit iron ore mines, Fabrica and Feijao,
 and a 4.0-million-tonne-per-year pellet plant in the Iron Quadrangle region in
 the state of Minas Gerais.
     From 1996 to 2000, Ferteco's sales volume grew by 18.1% per year, reaching
 24.9 million tonnes last year. Ferteco's main market has been Europe and TKS
 is its largest customer, with 6 million tonnes of fines and pellets in 2000.
 In parallel with this transaction, CVRD and TKS negotiated a long-term iron
 ore supply agreement that will allow the sale of larger volumes of Brazilian
 iron ore.
 
     Logistics
     Ferteco owns 10.5% of the total capital of MRS Logistica S.A. (MRS), a
 Brazilian railroad company. MRS has 1,612 kilometers of tracks, linking the
 states of Rio de Janeiro, Sao Paulo and Minas Gerais, with an 80-million-tonne
 capacity.  Ferteco operates a marine terminal through its wholly-owned
 subsidiary, Companhia Portuaria Baia de Sepetiba S.A. (CPBS), in the port of
 Sepetiba, Rio de Janeiro.
     Ferteco is also a traditional customer of CVRD transportation services,
 having shipped 10 million tonnes of iron ore and pellets last year through the
 Vitoria a Minas railroad and the Port of Tubarao.
 
     Financials
     Ferteco's consolidated net revenues in 2000 reached US$417.0 million,
 generating an EBITDA of US$92.0 million and net earnings of US$39.8 million.
 As of December 31, 2000, Ferteco had a net debt of US$131.3 million.
 
     Synergies
     There are strong synergies to be explored. Its main sources are related to
 transportation services and the rationalization of mining. The exploration of
 such synergies will translate into lower costs, a larger supply of diversified
 and high quality products, and the extension of the useful life of an
 important global supplier of iron ore due to the availability of the huge CVRD
 reserves.
     The acquisition of Ferteco helps to support CVRD's commercial strategy of
 developing true partnership relations with its customers. Together with its
 capacity to supply large volumes of iron ore, CVRD is able to provide specific
 solutions and tailor-made products to each client thus allowing them to obtain
 substantial productivity gains.
     Therefore, thanks to its reliability and the development of a diversified
 portfolio of high quality products, CVRD global leadership in the iron ore
 market is highly beneficial to the steel industry.
     JP Morgan Chase acted as exclusive financial advisor to CVRD in this
 transaction.
 
 SOURCE  Companhia Vale do Rio Doce