Scale / Cost
With 744000 tons of production capacity per year at its three plants, Vetorial is among the three largest independent producers in its country. Besides having a significant scale, the cost of production is distinguished by certain characteristics in the segment: new and state-of-the-art blast furnaces as well as equipment aimed at increasing productivity and reducing input materials. The company has its own logistics, tax incentives, easy access and self-sufficiency of raw materials (ore).

Tax Incentives
The company receives tax incentives as by way of ICMS (similar to GST – Goods and Services Tax) in accordance with Agreement No. 0036/2003, entered into with the State of Mato Grosso do Sul, consigning benefits equivalent to 85% (eighty-five percent) of the outstanding balance of ICMS. The company is committed to reversing 18% of these incentives into investments for the deployment of eucalyptus forests in Mato Grosso do Sul.

Logistics
Logistics is favored to carry the ore to the plants in Ribas do Rio Pardo and Campo Grande, by rail (by means of a long-term contract with ALL with price of shipping defined), and done by trucks to the plant in Corumba. Unlike many of its main competitors in the industry, Vetorial is totally independent at Vale, regarding logistics and iron ore supply. The wood transportation relies on favored logistics too, due to the proximity of forest industry plants (maximum radius: 300 km or 186 miles), thus significantly reducing the cost of freight.

Backward Integration
Vetorial operates vertically. It is self-sufficient in iron ore supply through its own mine and is constantly expanding the forest areas in order to reduce the need for purchasing coal from third parties, thus seeking self-sufficiency in the medium / long term. Vetorial has developed a logistics process itself by investing in rail systems with third-party contracts in exchange for long-term rail freight. In addition, it has a transportation company, which main customer is Vetorial itself, and it is responsible for taking the finished product to the customer.

Industrial Parks
Located in Campo Grande, Corumba and Ribas do Rio Pardo, all cities of Mato Grosso do Sul, Vetorial’s industrial parks stand out for cutting edge technology (which enables greater productivity) and the low average age of its blast furnaces (2.5 years), which results in lower maintenance costs. The plants in Corumba and Ribas have co-generation power, enough to supply the blast furnaces and to sell the surplus in the spot markets.