August 22, 2008

Gerdau buys stake in CCA to enter Central America

The Gerdau Group has entered into a strategic alliance with Central America's largest steel manufacturer, Corporación Centroamericana del Acero, with an installed capacity of 500,000 tonnes of steel and 690,000 tonnes of rolled products

As a result of this alliance, the Gerdau Group now holds 30% of the company shares and has committed to investing USD 180 million in the operations of Corporación Centroamericana del Acero in Central America. The company management will be shared with current stockholders.

The transaction announced today involves a steel mill in Guatemala, four rolled product rolling mills in Guatemala and Honduras, sales offices in Guatemala, Honduras, and El Salvador and distribution units in Guatemala, Belize, El Salvador, Honduras, and Nicaragua. Additionally, the company holds minority interest in the Intrefica company in Honduras, dedicated to die related activities.

Mr André Gerdau Johannpeter CEO of Gerdau Group said that “The partnership with Corporación Centroamericana del Acero places the Gerdau Group among the major players in Central America and the Caribbean. Central America is a strategic region and has now become an important operation, along with the units in Mexico and the Dominican Republic, in meeting the local market demands. In addition, Central America has presented significant levels of economic growth over the past few years.”