By Brazil Stock Guide – Benjamin Steinbruch is stepping away from the executive leadership of CSN — but not from CSN itself. Starting Sept. 3, Fabio Schvartsman, the former Vale CEO and a friend of Steinbruch for more than 40 years, will take over as chief executive, while the controlling shareholder returns as chairman. For investors, the main question is not the résumé of the 72-year-old incoming CEO, but how much room he will actually have to run a company whose decision-making has historically revolved around its controlling shareholder.
In an internal message sent to roughly 40,000 employees and obtained by Brazil Stock Guide, Steinbruch framed the change as the beginning of another transformation at the Brazilian industrial conglomerate. He recalled the 33 years since CSN was privatized and described the creation of a group that now extends far beyond steel, spanning iron ore, cement, railways, ports, logistics and energy, as well as international operations. In mining, he highlighted CSN’s position among Brazil’s largest iron-ore exporters; in cement, he pointed to an expansion built in part on synergies with its steelmaking operations.
Steinbruch also placed the transition within his family’s broader business history — from agriculture to textiles, then steel and ultimately the diversified conglomerate CSN has become. Against that backdrop, he introduced Schvartsman as a friend of more than four decades who has been chosen to lead what he described as another stage in CSN’s transformation.
In 2017, just months after Schvartsman took over as Vale CEO, market speculation emerged about a possible tie-up between the miner and CSN’s Casa de Pedra iron ore mine, which Vale denied at the time.
That is precisely where the governance test begins. Steinbruch has personally run the business for decades and has brought in outside executives before, some of whom were viewed as potential successors. The last CEO other than Steinbruch was Maria Silvia Bastos, who left the company in 2002.
In recent years, Steinbruch has also split his time between Brazil and Uruguay, where he has a residence and spends extended periods. Even so, he has remained directly involved in both strategic and operating decisions at CSN.
For analysts who follow the company, the question is whether the formal separation between the board and management will now translate into a genuine division between strategy and execution. Steinbruch’s long personal relationship with Schvartsman could make that transition easier — or make the boundaries between their roles even harder to define.
The second test is financial. CSN ended June with R$42.1 billion in net debt and leverage of 3.49 times EBITDA, while seeking to execute an asset-sale program aimed at reducing debt by R$15 billion to R$18 billion. Its cement business and infrastructure stakes are among the assets at the center of that effort.
The company said in its second-quarter results that it continues to advance those divestment plans. China’s Huaxin and a Votorantim/Cementir consortium are seen as frontrunners for the cement assets.
That makes Schvartsman’s arrival more than a management succession. Before joining Vale, he built a career at companies including Ultrapar, Duratex and Klabin, with experience spanning strategy, finance, capital allocation and corporate transformation. At CSN, he will have to show whether he can accelerate asset sales, bring leverage down and reshape a conglomerate whose diversification was built over decades under Steinbruch.
His tenure at Vale, however, inevitably follows him back into the top job at one of Brazil’s largest industrial groups. Schvartsman was Vale’s CEO when the Brumadinho tailings dam collapsed in January 2019. In April this year, Brazil’s Superior Court of Justice ordered criminal proceedings against him related to the disaster to resume, allowing charges including aggravated homicide and environmental crimes to move forward. He has not been convicted, and the case remains pending.
In the end, the most consequential transformation at CSN may have less to do with steel, iron ore or cement than with its governance. The market will now find out whether CSN is evolving from a company directly managed by its controlling shareholder into one where Steinbruch sets the strategy from the boardroom — and the CEO actually runs the business.
Leave a Reply