Gerdau

Gerdau S.A.

Type	Sociedade Anônima
Traded as	BM&F Bovespa: GGBR3, GGBR4 NYSE: GGB BMAD: XGGB
Industry	Iron and steel
Founded	1901
Headquarters	Porto Alegre, Brazil
Key people	Jorge Gerdau Johannpeter, (Chairman) André Bier Gerdau Johannpeter, (CEO)
Products	Long steel, specialty steel, flat steel, and other steel products
Revenue	US$16.8 billion (2013) ^[1]
Net income	US$716.8 million (2013) ^[1]
Number of employees	45,000(2013)
Website	www.gerdau.com

Gerdau, headquartered in Porto Alegre, the capital and largest city in the Brazilian state of Rio Grande do Sul, is the largest producer of long steel in the Americas, with steel mills in Brazil, Argentina, Canada, Chile, Colombia, Dominican Republic, Guatemala, India, Mexico, Peru, Spain, United States, Uruguay and Venezuela. It also holds a 40% stake in the Spanish company Sidenor. Currently, Gerdau has an installed capacity of 26 million metric tons of steel per year and offers steel for the civil construction, automobile, industrial, agricultural and various sectors.

Gerdau is the world’s 14th largest steelmaker and the largest producer of long steel in the Americas. It has 337 industrial and commercial units and more than 45,000 employees across 14 countries.

History

Residence and company Estate Society João Gerdau, 1885

Gerdau was founded by Johannes Heinrich Kaspar Gerdau, known as João Gerdau, a German migrant who left the port of Hamburg for Rio Grande do Sul, in Brazil, in 1869 in search of new business opportunities. He arrived at the port of Rio Grande, Rio Grande do Sul and, at only 20 years of age, established himself in Colônia de Santo Ângelo (now the town of Agudo), where he invested in trade, transport and the subdivision of land. He moved to the town of Cachoeira do Sul in 1884, where he founded an important General Store. Always seeking new opportunities, João Gerdau moved again, this time to Porto Alegre, with his wife Alvine Gerdau and his three children, Hugo, Walter and Bertha. There he went into industry, buying the Pontas de Paris Nail Factory in 1901 marking the entry into steel industry.

Curt Johannpeter's entry into the Gerdau family marked the beginning of a new direction for the company. Born in Germany in 1899, Curt Johannpeter made his career in finance. In 1922 he began to work for the German Transatlantic Bank, a subsidiary of Deutsche Bank. In 1930 he became the branch inspector for Portugal, Spain and Latin America, and in the same year was introduced to the young Helda Gerdau during a trip to Brazil. They married and had four sons: Germano, Klaus, Jorge and Frederico. In 1946, Johannpeter took the wheel of the Gerdau company and oversaw a critical phase in its expansion.

Today

Gerdau's core business is to transform steel scrap and iron ore into steel products.

Gerdau is a leading producer of long steel in the Americas and one of the largest suppliers of special steel in the world. It is the largest recycler in Latin America and around the world it transforms, each year, millions of metric tons of scrap into steel, reinforcing its commitment to sustainable development in the regions where it operates. With more than 140,000 shareholders, the Company is listed on the stock exchanges of São Paulo, New York and Madrid.

Its operations are based on the integrated regional market mill concept by which raw materials are bought from nearby suppliers and products are primarily sold in the same region. This brand of by-product synergy led to the acquisition of Chaparral Steel in 2007, a company which has been noted for creating interchange between head management and workers and deliberately employs a maximum of 1000 people (the size of a village).^[2] Gerdau operates through three different processes:

Mini mills
Integrated mills
Direct reduced iron plant

Products and services

Gerdau produces long carbon steel, long special steel, flat steel and forged and cast parts. These products are used in different sectors, such as industry, metallurgy, farming and livestock, civil construction, automotive industries, petrochemicals, railway and naval sectors, in addition to orthodontic, medical and food areas. Gerdau is also the main supplier of specialty steel for the international automotive network.

Internationalization of the Gerdau Group

Long before its possibilities of expansion on the Brazilian market were exhausted, Gerdau had established strategies for external expansion, starting at the end of the 1970s. Their fundamental objectives were to conquer the U.S. market. Based on limited international experience managing a mini mill plant in Uruguay for almost a decade, the group first aimed at the North American market for long steel, starting with Canada. Later, after a decade of experience in conditions that were radically different than those existing in Uruguay (the location of its first foreign venture), Gerdau entered the U.S. market. Entry into North America was complemented by other ventures in all of Latin America, from Chile and Argentina to Mexico and the Caribbean. The North American experience, like the Brazilian, demonstrated the strategic necessity to enter new markets such as Europe (with special steels) and Asia (with long steel and final structures of special steel)^[3]

Business operations

Gerdau is spread globally across 14 countries with its integrated and semi-integrated steel mills. Apart from steel mills, Gerdau also has downstream processing facilities.

Offices: Gerdau has its major offices at Porto Alegre, São Paulo, Tampa, Whitby, Polanco, Lima, Caracas, Bogota, Jackson and Bangalore.

Brazil Business Division: Gerdau has two Brazil business divisions divided as Mining Americas and Steel Brazil

Special Steel Business Division: Gerdau produces specialty steel especially for the automotive industry through its special steel divisions, Special Steel North America, Special Steel Brazil, Special Steel Europe and Special Steel India.

Latin America Business Division: Gerdau produces most of the long and flat products at Latin America North, Colombia, Mexico, Sizuca (Venezuela), Latin America South, Argentina, Chile, Peru and Uruguay

Assets

58 steel mills
21 downstream operations
94 fabricated reinforcing steel facilities
4 flat steel service centers
80 retail facilities
32 scrap collection and processing facilities
4 iron ore extraction areas
2 solid pig iron production units
2 private port terminals
1 Reinforcing Steel Placing Company

References

1 2
↑ Leonard-Barton, Dorothy, "The Factory as a Learning Laboratory", Sloan Management Review, Winter 1993
↑ Lannes, Jose. "The Gerdau Group: The Creation of a Global Competitor". Revista Apuntes 41 (75): 141. Retrieved 8 April 2015.

External links

Ibovespa companies of Brazil (as of September 1, 2014)

S&P Latin America 40 companies (as of June 30, 2014)

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