Brazil steel firm Gerdau injects $US1.4bn in SiderperuFont Size:...

Brazil steel firm Gerdau injects $US1.4bn in SiderperuFont Size: Decrease Increase Print Page: Print September 02, 2008
BRAZILIAN steel firm Gerdau will invest $US1.4 billion in its Peruvian subsidiary to transform Peru into a regional steel powerhouse.

The $1.64 billion investment by Gerdau is intended to maximise the profitability of its Peruvian unit, Siderperu, from Brazil’s building boom.

The injection will boost yearly production at Siderperu and enable it to meet Peru's entire domestic steel demand, Gerdau CEO Andre Gerdau Johannpeter said.

Peru now imports half the steel that it needs, the CEO said.

Gerdau, Latin America's biggest steelmaker last year, acquired 83 per cent of Siderperu for $US203 million in 2006.

Siderperu now produces 450,000 tons of steel annually at its main complex in the coastal fishing town of Chimbote - about 17 per cent of Gerdau's yearly output.

The injection of funds will boost production at Siderperu more than six-fold to 3 million tons by 2013, positioning it to also increase exports across Latin America and ultimately to Asia.

The additional steel exports could eventually help close Peru's trade deficit with Brazil, said Brazil's ambassador in Lima, Jorge d'Escragnolle Taunay.

Trade between the neighbouring nations reached $US2.2 billion last year, he said.

Gerdau - which started as a nail company in 1901 and now operates in 10 Latin American countries as well as India, Spain, Canada and the US - has already pledged $US122 million to improve environmental standards at the Siderperu plant.

Siderperu's workforce is expected to double to 4250, and a further 4000 temporary construction jobs will be created as well.

AP