Until 2007, with the exuberance of the global steel market, driven by China, Gerdau group went on a shopping spree. It has gained strength, expanded its geographic reach and took the opportunity to start diversifying. Thus it became the largest manufacturer of long steel in the Americas - second in the world - and one of the global leaders in steel for the automotive industry. The 2008 crisis that shook the world's economies demanded a new strategic configuration.
Currently, the global industry scenario is of steel oversupply, competition with Chinese, Russian, Korean and Turkish products, difficulties to export, depressed prices and tight profit margins. The strategy is: more horizontal and vertical diversification in the production chain and seeking management, efficiency and cost gains to stay competitive.
Source: Valor International
Currently, the global industry scenario is of steel oversupply, competition with Chinese, Russian, Korean and Turkish products, difficulties to export, depressed prices and tight profit margins. The strategy is: more horizontal and vertical diversification in the production chain and seeking management, efficiency and cost gains to stay competitive.
“Today, our focus involves flat steel, with projects in Brazil, investment in iron ore, expanding the specialty steel business in Brazil and the US and entry into India, and management to have efficiencies in all our operations,” the businessman says.
This year the company merged Gerdau Aços Longos in Brazil with Açominas, creating a single company, Gerdau Aços Brasil.
“We are firmly working in this strategy to differentiate ourselves, seeking better earnings,” the executive says.
Currently, with annual sales of around 19 million tons of steel, the group gets 36% of its revenues in Brazil, 30% in the US, 21% in specialty steels (Brazil, US and Spain) and 13% in Latin America. Sales totaled R$38 billion last year. In generating operating profit, Brazil accounts for almost three-fifths - around 58%. Then it comes specialty steel with 21%, the US with 12% and Latin America with 9%. The installed capacity in 60 plants and rolling mills is 25.5 million tons. The group occupies the fourteenth position in the world ranking of the World Steel Association (WSA).
In Mexico, Gerdau is investing $600 million in a heavy profiles plant, within a plan to meet Americas demand for this product also from Brazil and the US. This project aims mainly toward import substitution and export to regional markets. “In the region, there is much to do in infrastructure in Peru, Colombia, Guatemala, Chile, Venezuela and Mexico itself.” The plant will have capacity of 1 million tons of steel and 700,000 end products (profiles).
Source: Valor International
