To meet the growing demand for steel, Brazilian steel producer, Gerdau S.A. (GGB) announced investments of approximately R$2.47 billion in the State of Rio de Janeiro. The expansion not only benefits Gerdau but also creates 550 direct and 3,000 indirect job opportunities in the state.
According to the investment plans, steel production capacity of Gerdau’s Santa Cruz-based Cosigua mill will be expanded by 50% to 1.8 million tons per year. In addition, a new wire rod and rebar rolling mill with annual capacity of 1.1 million tons will be installed.
The investments will be executed in two phases. The first phase, covering the period 2011-2013, will involve expansion of production capacity at the melt shop (expected to be operational by 2012) and startup of the new wire rod and rebar rolling mill in 2013. The initial capacity is projected to be 600,000 tons per year. A new rebar fabricating facility will also be installed during the phase.
In the second phase covering the period 2014-2016, the rolling mill will start operating at an installed capacity of 1.1 million tons, which is expected to reach 2.6 million tons by the end of the phase. The company will also work toward expansion of the mill’s dedusting system and having a proper infrastructure around the industrial unit.
We believe Gerdau S.A. is one of the leading Brazilian steel makers and stands at an advantageous position to leverage from the growing world steel market. Global steel demand is projected to increase rapidly in the quarters ahead.
The Brazilian steel industry is also very likely to get a boost as steel demand from the manufacturing and construction industries grows. Further, the company will host the 2014 World Cup and the 2016 Olympic Games.
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