EALT4 Electro Aço Altona

Electro Aço Altona S.A. is a century-old company in the metallurgy sector, with common and preferred shares traded on B3 under the tickers EALT3 and EALT4. Its origins date back to March 8, 1924, in Blumenau (SC), when German engineer Paul Werner, then responsible for installing the city’s first telephone exchange, partnered with blacksmith Ernst Auerbach in the Altona neighborhood. The initial partnership, called Auerbach & Werner, produced household and agricultural utensils such as cast-iron pans, meat grinders, precision scales and farm implements. In 1933, the acquisition of an electric arc melting furnace marked its definitive entry into the steel foundry business, leading to a name change to Electro Aço Altona S.A. and making the company the first steel foundry in Santa Catarina and one of the pioneers in Brazil.

Over the decades, Electro Aço Altona expanded its technological scope and product portfolio, keeping pace with the evolution of Brazil’s industrial sector. In the 1940s, it stood out for innovation in the production of steel bells, which replaced traditional bronze bells and demonstrated its ability to adapt to new demands. In 1950, the company was registered with the Comissão de Valores Mobiliários (CVM), consolidating its presence in the Brazilian capital markets. In 2024, the company celebrated its 100th anniversary at an event held in Blumenau, reinforcing its importance to the regional and national economy and its continuous track record of investment in technology, industrial modernization and sustainability practices.

Electro Aço Altona’s business model is focused on casting and machining parts made from carbon steels and special alloys, operating as a basic industry that supplies components to other industrial segments. The company produces both made-to-order and series parts, meeting the technical specifications of different large-scale projects. Its production capacity reaches 1,250 tons per month in a plant covering 120,000 square meters, combining arc and induction melting furnaces for the production of sophisticated alloys. In addition to steel castings themselves, the company offers complementary services such as heat treatment, non-destructive testing, X-ray, precision machining and finishing, which allows it to deliver components either ready for use or in an advanced stage of processing to its customers.

In terms of products, Electro Aço Altona manufactures a wide range of metal parts that are used in various industrial equipment and systems. Key items include rings and bearings; rotors, disintegrators, fittings, housings and pumps; levers, bushings, ladles, cylinders, grinding tracks and rolls; accessories for anchors, lifting eyes and connectors; as well as bar links, teeth, cylinder bottoms, crossheads, conveyor supports, arms, trestles and forks. The company also develops non-listed products made on demand for specific customers, reinforcing the custom-made nature of a relevant part of its operations. The production process follows full metallurgical steps, from pattern-making in materials such as wood, plastic or metal, through molding in special sand, alloy pouring, shakeout, gating system cutting, rough finishing, heat treatment and machining on more than 30 dedicated machines.

Electro Aço Altona’s customer base consists mainly of other industrial companies, construction firms and power generators, which use its components in industrial and infrastructure projects. The company emphasizes that it positions itself as a supplier for large custom projects, placing it among a select group of global companies capable of delivering highly complex solutions in steel castings. Within its portfolio, the construction and mining segment is particularly relevant, with two customers in this area each accounting for more than 10% of total net revenue. Together, these two customers represent approximately R$ 190 million in Net Operating Revenue, highlighting the strategic importance of the heavy construction and mining chain in the company’s demand profile.

Electro Aço Altona has a significant international presence in the sale of steel castings, exporting to more than 25 countries. Foreign revenues are mainly distributed across North America, Latin America, Europe, Asia and Africa. In 2024, the external market for steel castings totaled R$ 353.6 million, with North America accounting for the largest share, followed by Europe, Asia and Africa, and to a lesser extent Latin America. To support its internationalization strategy, the company maintains dedicated commercial structures abroad: since 2018 it has operated the Altona Europe office in Germany, focused on expansion in Europe, and since 2023/2024 it has had the Altona North America office in the United States, structured to support sales in North America. In Brazil, revenue remains significant, with the domestic market still accounting for the majority share of consolidated net revenue from steel castings.

In addition to its core metallurgy operations, Electro Aço Altona has organized a group of subsidiaries with support functions and operational synergies. Administradora de Bens Altona S.A., established in 2017/2018, is responsible for selling plots of land not belonging to the industrial site and acquiring properties of interest to the group. Modelação Kimze, acquired in 2019 and located in Gaspar (SC), contributes to the pattern-making stage, reducing costs and increasing agility in this critical phase of the casting process. Also in Gaspar, Indústria Magayver, acquired in 2020, produces wooden “case” type packaging for protecting and transporting parts, enabling greater control over costs and packaging development. In 2022, Altona Engenharia Industrial Ltda. was created, headquartered in Pomerode (SC), dedicated to the development and production of proprietary products, boiler shop services and general industrial fabrication, with a focus on heavy structures and machinery and direct support for the parent company.

In regulatory and environmental, social and occupational terms, Electro Aço Altona operates under a broad framework of local, state and federal laws and regulations, as well as specific certification requirements for supplying Brazilian and foreign customers. The company maintains dedicated departments for environment, health and safety, responsible for managing issues such as emissions, disposal of hazardous materials, handling of risky inputs and protection of employee health. To operate, it depends on permits such as an Operating Environmental License issued by the state environmental agency (FATMA), a Federal Police certificate for use of certain controlled chemical products, location and sanitary permits and the Fire Department Inspection Report. The company states that it continuously monitors environmental legislation and annually earmarks budgetary resources for required adaptations. In ESG governance and transparency, it publishes an annual sustainability report, available on CVM channels and on its investor relations website, although this document has not yet been audited by an independent entity and is in the process of being aligned with more structured practices for disclosing environmental, social and governance indicators.

From a competitive standpoint, Electro Aço Altona operates in a niche where technical expertise in made-to-order projects, combined with the ability to produce special alloys, is a key differentiator in competing for global contracts. Its location in Blumenau, with easy access to highways, ports and airports in the South region, is favorable for export logistics, although the company does not have its own transport fleet, outsourcing the shipment of production in line with contractual arrangements with customers. The company notes that the Brazilian exchange rate increases its competitiveness in the international market as a supplier, while at the same time requiring strict cost control over imported inputs such as ferroalloys and some regulated chemical products. With no dependence on single suppliers and raw materials based on steel scrap and ferroalloys, the company is exposed to the typical volatility of metal commodities but seeks to mitigate this exposure through purchasing management and relationships with multiple industrial partners.

Finally, Electro Aço Altona pursues a policy of protecting its main brand, “ALTONA,” registered with the Instituto Nacional de Propriedade Industrial (INPI) and renewed periodically, and states that it does not make financial contributions to political parties, candidates or initiatives aimed at directly influencing public policy decisions. For investors tracking EALT3 and EALT4 shares on B3, this is a company whose value creation is directly linked to the industrial cycle and demand for highly complex steel components for construction, mining, energy and other heavy applications, with a significant presence in the foreign market and operations structured around a specialized industrial plant and supporting productive, logistical and commercial subsidiaries.