December 02, 2008

Gerdau to focus on overseas consolidation for expansion

It is reported that Brazilian steel maker Gerdau will focus on international market for expansion. Mr Osvaldo Burgos Schirmer financial director told the local press on that Gerdau's expansion plans have been targeting China, which is a globally important market, particularly when it comes to special steels. He stressed that the company will continue to focus on its consolidation abroad.

Mr Schirmer said that 55% of Gerdau's production capacity, of 17 million tons per year, is concentrated in the international market. It currently operates production units in the United States, the Dominican Republic, Mexico and Venezuela.

In June 2007, Gerdau and the Kalyani Group announced the creation of a joint venture to operate a steel plant in India, with a capacity to produce 275,000 tons of steel per year. Mr Schirmer explained that such strategy aims to allow the company to face foreign competitors and grow beyond the limits imposed by the Brazilian market.

However, he stressed that the global targets will not replace the domestic ones and the possibility of acquisitions in the local market is not discarded. He also revealed that Gerdau plans to expand its total capacity to 20 million tons up to 2009, with an investment of USD 1.3 billion over the next three years.