PATI4 Panatlântica

Panatlântica is an industrial company with a long track record in Brazil’s steel processing sector. Its origins date back to 1967, when it was formed through the merger of Cia. Panatlântica de Comércio do Rio Grande into Indústria de Laminados do Rio Grande S.A., both founded in 1961 under the same controlling group. In 1971, the company became a publicly traded corporation, and its shares began trading in the capital markets. Currently, the company’s common and preferred shares trade on B3 under the tickers PATI3 and PATI4, placing Panatlântica among the companies accessible to both retail and institutional investors. Throughout its history, the company has expanded and modernized its industrial facilities, seeking to adapt to the demands of different segments of Brazilian industry.

Panatlântica’s main industrial site is located in the Industrial District of Gravataí, in the state of Rio Grande do Sul, in facilities described as large and modern, structured to operate as part of an accredited distribution network for steel products. The company’s sales are spread across various industrial activities, which reduces dependence on any single economic sector or large customer concentration. According to information in the reference form, the largest customer accounts for approximately 5% of sales, and there is no individual buyer with a share of more than 10% of net revenue. This diversified demand profile is a relevant element for investors when assessing Panatlântica’s exposure to specific cycles in certain industrial sectors.

Over time, Panatlântica has built a group with subsidiaries and branches to expand its production and logistics capacity. In 1986, its former branch in Joinville, in the state of Santa Catarina, was converted into a wholly owned subsidiary under the corporate name Panatlântica Catarinense S.A. Later, the company opened new branches in the South Region and, in 2007, installed the first industrial pavilion of Tubospan S.A. in São Francisco do Sul (SC). In the first quarter of 2008, the pavilion of the Glorinha (RS) branch was inaugurated. In 2013, Panatlântica acquired 100% of the share capital of Atkore International Indústria e Comércio de Aço e Materiais Elétricos Ltda., headquartered in Caxias do Sul (RS), which was renamed Panatlântica Indústria e Comércio de Tubos S.A., focused on mechanical and sprinkler pipes, conduits, slitter, plates and structural shapes. Also in 2013, Panaser S.A. was inaugurated in Farroupilha (RS), with the aim of decentralizing industrial activities and providing faster and better customer service. In 2019, the company acquired Induminas S.A. in Contagem (MG), which was later merged in September 2024, with the related property sold in October 2024. In 2022, the branch of Panatlântica Indústria e Comércio de Tubos S.A. in Campo Limpo Paulista (SP) was opened, reinforcing the company’s presence in important industrial hubs in the country.

Panatlântica’s business model is based on the processing and commercialization of steel products, with steel plates and coils purchased from domestic steel mills as its main raw materials. These coils may be heavy, hot-rolled, cold-rolled, pickled and oiled, galvanized, galvalume or pre-painted. The company can sell these materials “as is” or reprocess them in-house to add value according to customer specifications. The coils can be leveled and cross-cut to produce steel plates in various sizes, or slit longitudinally to produce strips in coil form. From these plates, the company can produce slit strips, blanks, folded shapes and other formats intended for multiple industrial applications. The strips in coils may be sold directly or used as raw materials for the manufacture of welded tubes, continuous shapes or cold re-rolling, adjusting physical and chemical properties for specific uses.

In addition, Panatlântica uses coils with special coatings, such as galvanized, galvalume and pre-painted, for continuous forming processes that result in metal roofing sheets used in roofing and side cladding in construction and industrial structures. The operations of Panatlântica Indústria e Comércio de Tubos S.A. complement this chain, focusing on mechanical and sprinkler pipes, conduits, slitter, plates and structural shapes, expanding the portfolio of processed steel products. Although the company has different production units and subsidiaries, it identifies its entire operation as a single operating segment for management reporting purposes, which indicates that revenue generation is concentrated in an integrated chain of steel processing and distribution rather than in entirely distinct lines of business.

Panatlântica mainly serves industrial sectors and works predominantly on a made-to-order basis, based on its customers’ technical specifications. The steel coils processed by the company are destined for industries in the leather-footwear, electrical and electronics, home appliances, civil construction, shipbuilding, agricultural machinery and implements, and general metalworking segments. These sectors require products with specific widths, thicknesses and physical-chemical properties, which reinforces its role as a supplier of specialized inputs at the beginning of the production chain. Imports of raw materials account for at most 1% of total purchases, which shows strong dependence on the domestic steel chain. Exports account for at most 6.5% of total sales, focusing mainly on Mercosur countries, while revenues from abroad represented less than 4% of net revenue in the last three fiscal years, maintaining the predominantly domestic profile of its operations.

From a geographical standpoint, Panatlântica serves customers throughout Brazil, with its products sold through sales representatives with predefined territories. These representatives negotiate with customers and forward purchase orders to the company, which adjusts its production to specific orders. The industrial and commercial structure is concentrated in the South and Southeast regions of the country, with units in Rio Grande do Sul, Santa Catarina, Minas Gerais (until the sale of the property related to Induminas) and São Paulo, which facilitates access to important industrial and logistics hubs. The company also states that shutdowns at steel mills, disruptions in heavy transport or in electricity supply can completely halt production, and that a shortage of oils and lubricants also impacts production lines over different time horizons, factors that are relevant for assessing operational risks.

Regarding management systems and operational governance aspects, Panatlântica maintains a documented quality system in compliance with ISO 9001:2015, certified under no. 130780-2013-AQ-BRA-INMETRO. This system guides production and quality control processes on its industrial lines, supporting consistency in the products supplied to the various sectors served. On the social and environmental front, the company states that it is integrated into the life of the communities where it operates, generating material and intangible wealth and complying with the social and environmental laws established by the competent authorities. On the other hand, the company reports that it does not publish a sustainability report, explaining that it has not yet evaluated the topic in the depth required to treat it as a determining factor in leveraging its business. For investors analyzing the PATI3 and PATI4 shares on B3, these elements help form a picture of the company’s maturity in quality, social and environmental responsibility, and transparency of non-financial information.