Sao Paulo, Brazil, 29 June – Brazilian group Gerdau, the largest producer of long steel on the American continent, said Wednesday it would invest in expanding its international markets, namely China, Company officials said.
The US$1.5 billion investment will make it possible to increase the group’s production from the current 19 million tons to 20.5 million tons of steel per year.
The increase in production will be carried out through subsidiary Açominas, in the state of Minas Gerais in south-eastern Brazil, which is responsible for the group’s exports to China.
A statement from Gerdau said that world demand for steel would continue to rise, mainly due to Chinese consumption.
The capacity of the Group’s unit located in the city of Ouro Branco will be increased from 3 million to 4.5 million tons of steel per year.
The Gerdau group is currently the 14th largest in the world in the sector with factories in Brazil, Argentina, Canada, Chile, Colombia, the United States and Uruguay.
Gerdau, which also owns 40 percent of Spain’s Sidenor, was founded 105 years ago, with a nail factory in Porto Alegre, the capital of the state of Rio Grande do Sul.
Since 2001, the Group has been exporting steel products, namely plates and blocks for the Chinese market.
The Brazilian group recently said it was looking at investment opportunities in China, within the scope of its strategy of acquiring foreign steelworks to deal with the markets in these countries.
The company’s vice president, Ruy Lopes, declined to say which projects his group was looking at in China.
Last year, the Gerdau group posted net profit of US$1.616 billion, a rise of 0.3 percent against 2004.
The company’s turnover totalled US$12.03 billion in 2005, or an increase of 8.9 percent on 2004. (macauhub)