Gerdau Invests $320MM in North America Expansion

Gerdau SA, one of the world’s largest suppliers of special steel and the leading producer of long steel in the Americas, announced plans to invest USD 320 million to expand its special bar quality steel production capacity in North America by 400,000 tons through 2014.

Investments will be destined for output expansion at special steel mills operated by Gerdau Macsteel at Jackson in Michigan, Monroe in Michigan and Fort Smith in Arkansas as well as at the Gerdau Ameristeel mill at St Paul in Minnesota.

The company is also conducting a technical study for construction of a new SBQ mill in North America. The new mill, to be operated by Gerdau Macsteel, will provide an additional annual installed capacity of between 700,000 tons and 800,000 tons, consolidating Gerdau’s market leadership in the North American SBQ space.

The new investments are in addition to a USD 67 million capital expansion program announced by the company for its Gerdau Macsteel SBQ mill in Monroe, Michigan last year. The program, whose first phase is scheduled for completion in 2012, will increase the mill’s annual production capacity by 200,000 tons. Completion of the overall investment program will give Gerdau an additional output capacity of 600,000 tons over the next three years, without considering tonnage to be added by the new mill under consideration.

Gerdau is expanding its SBQ production capacity in North America to meet increased customer demand and quality expectations. The company remains bullish on current trends that show substantial growth in the automotive and industrial sectors, presenting opportunities for Gerdau to satisfy increasing demand for special steel.

Guilherme Gerdau Johannpeter VP of Gerdau Macsteel said “These new investments reinforce Gerdau’s ongoing commitment to the North American market. They are in response to the company’s view on the market outlook and our leadership position in the SBQ space. North American manufacturers are globally competitive and poised for strong growth; Gerdau’s increased capabilities will allow us to meet our customers’ demand for high quality special steel products. Gerdau is confident that this expansion will solidify our footprint in North America.”

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