 Gerdau to invest $1.4b to expand Peru unit while increasing exports
(China Daily)
Updated: 2008-09-03 07:28 Gerdau SA, Latin America's biggest steelmaker, will invest $1.4 billion to expand its Peruvian unit and increase exports to other countries in the region. The expansion of Empresa Siderurgica del Peru SA will boost steel output to 3 million metric tons a year by 2013 from 450,000 tons now, announced Chief Executive Officer Andre Gerdau Johannpeter. "Peru will be one of South America's three largest steel producers" Gerdau Johannpeter told reporters yesterday after meeting with Peruvian President Alan Garcia in Lima. "Siderperu will export to Chile and Colombia, and later to Asia and the rest of Latin America." Garcia is seeking to attract more foreign investments to the country in exchange for allowing companies such as Porto Alegre, Brazil-based Gerdau to ship to Asian buyers through Peruvian ports. Brazilian companies Petroleo Brasileiro SA, Braskem SA and Centrais Eletricas Brasileiras SA are studying investments in Peru, and Odebrecht SA is building an $800 million highway between the two countries. Gerdau paid $101 million in 2006 for an 83.3 percent stake in the unit, known as Siderperu. The steel mill, located at the northern coastal port of Chimbote, about 350 kilometers (220 miles) northwest of Lima. It will produce long- and flat-steel products, the company said in an e-mailed statement. The expansion, which will create 4,000 jobs, will take place in two stages, and the mill will initially produce 1.5 million tons by 2011, Gerdau Johannpeter said. Latin America's steel consumption is growing as much as 8 percent a year, Johannpeter said. Gerdau is considering the sale of bonds on the Peruvian debt market to help finance the project, said Siderperu manager Luiz Augusto Polacchini. Gerdau shares fell 56 centavos, or 1.8 percent, to 30.14 reais in Sao Paulo trading. The stock has climbed 26 percent in the past year, compared with a 1 percent gain for Brazil's benchmark Bovespa index. Agencies (China Daily 09/03/2008 page17) |
