Gerdau will invest R $550 million in plant

Gerdau announced on Thursday, 22, an investment of RS $550 million in your plant in Pindamonhangaba, in the Paraíba Valley, interior of Sao Paulo. "This is a sign of optimism and confidence in the next Government," said the President of Rio Grande steel, Gustavo Werneck, who in January completes a year ahead of the company. According to the Executive, this will be the first step to be given by the company to increase the production capacity of 600,000 tons per year of current specials to 1 million tons. The start-up investment target should occur in 2020. The project will allow the Gerdau start production of lighter and resistant steels, with application in the manufacturing of electric and hybrid vehicles. "Let's invest in assets that we have now. There are new needs of materials in the automotive industry and we want to get before the need to market. We're going to have inherent to investment technology update of our assets, "said Werneck. Werneck points out that the investment is part of the company's strategy to focus on higher-return assets, a process that took the group to sell some R $7 billion from 2014 to focus your portfolio in the Americas. Despite the investment being announced now, the operation has been studied from 2016. The topic came up at the table by the own program of divestitures, which made the company look at the assets of greater profitability. For this year, Gerdau's disbursements will be of the order of RS $1.2 billion, intended primarily for maintenance operations. The budget for the coming years will be announced to the market in February 2019. Gerdau studies too, according to Werneck, the reform of blast furnace of white gold, in Minas Gerais, which must occur in 2022. In a report to the market, BTG Pactual, stated that the investment announced by Gerdau is timely and aims at the increase in demand in the automotive industry, in particular in the field of electric and hybrid vehicles, as well as to prepare the company for growth Brazil's economic forward. Optimism the expectation of Gerdau steel consumption in Brazil for the next year is very positive, given the perception that barriers to new investments in the country should be solved already in the first months of 2019. Gerdau has established a focus in special steels, but the projection is positive for consumption in infrastructure in Brazil, from the second half of next year. "The works with the new Government must appear more intensely," said Werneck, pointing out that in this sector the recovery has a somewhat slower pace.