BRAZIL
Performance

  Domestic sales and exports together were 22% higher than in 2001, reaching a total of 5.8 million metric tons.

  The growth of Brazil's agricultural industry contributed to increased domestic sales, which totaled 3.9 million metric tons, 6% higher than the previous year. In the same period, export shipments reached the record level of 1.9 million metric tons, an increase of 77%, due primarily to the consolidation of Açominas.


Long Steel Products
Strategy

  The commercialization of long steel products is structured into business areas focused on different market segments, thus allowing the needs of each customer to be better serviced.

   Solutions for civil construction help to increase the productivity of the sector, one of the largest in the Brazilian economy, responsible for around 15% of GDP. As a result of this strategy, the Gerdau Group closed the year with 35% growth in sales of higher value added products, especially fabricated rebar and truss frames.

  In the industrial sector, the Company broadened Brazil's largest and most complete line of products with more than 300 innovations for use in a range of sectors including automotive, light construction, tools and general metalwork. Gerdau also offers low and high carbon steel wires for industrial applications, wires for welding and wire ropes. Two new products were launched in this area: Gerdau Serralheiro E6013 welding rod in 5 kg packages and MIG welding rod in 100 kg barrels.

   Gerdau's activities in the agricultural sector are marked by the development of specialized products and services, adapted to the characteristics of each of Brazil's regions. Rural producers are serviced with high-technology steel that is durable and easy to use, bringing greater safety to work in the field.

   The world's largest manufacturer of nails, the Group is constantly involved in the identification and development of new market niches, with the ongoing drive to diversify its product line and increase its quality. It is highly visible in 105,000 retail outlets around the country.

  In 2002, the quality of the products and services of the long steel sector was once again recognized through a number of awards, consolidating the Gerdau brand as one of the most remembered in various sectors. This recognition is also the result of strong efforts in building relationships within each market sector, through technological updating meetings and courses held to perfect customer business management.

Specialty Steels
Strategy

   The specialty steels - engineering steels, tool steels and stainless steels - are produced by Gerdau Aços Finos Piratini, located in Charqueadas, state of Rio Grande do Sul. The mill sells 80% of its output to the automotive industry.

   To meet the constant need for innovation in the industry, the mill has the practice of developing new products in partnership with its customers.

  This year, it released ultra-clean bearing quality steels, steel for offshore mooring chains and steel with high stampability for bolt production.



Açominas
Strategy

  Producer of semi-finished and rolled long steel products, Açominas is focused on the international market, with products shipped mainly to Asia, North America and Europe. A world leader in the production of high quality billets, its sales policy is also based on long term relationships, as can be observed in the continuity of its customer portfolio: 85% of customers have been dealing with the Company for more than ten years.

   Açominas' business activities are structured in distinct areas, which operate in a segmented manner to service the domestic and export markets. The Company's activities in Brazil are divided as follows: industry, re-rolling, forging and flat steel products. Regarding the international markets, the Company has groups of executives specialized in the following regions: Southeast Asia, East Asia, South and Central America, North America, Europe and Africa.

  The production of structural shapes in 2002 resulted in the creation of two new commercial areas, one focused on market development and the other on product sales. The products are used primarily in civil construction, a sector offering significant perspectives for growth in the coming years.

   Açominas, in line with the principles of environmental efficiency, also operates in the carbon products sector, carrying out treatment of coke oven gas (COG), a by-product of the coal coking process. This generates products with a range of applications, including the fabrication of aluminum, plastics, solvents, paints, pigments, synthetic fibers and fuels. The principal products in this area are pitch, BTX, naphthalene and ammonia.