Steelmaking operations in Brazil are merged into a single company: Gerdau Açominas S.A., which combines the assets of Aço Minas Gerais S.A. - Açominas and Gerdau S.A. The initiative resulted in enhanced industrial and commercial synergies, an increased operating cash flow and a more rational tax structure.

Record exports from Brazil and growing sales from the units in Argentina, Canada, Chile, the United States and Uruguay translate into R$ 15.8 billion in gross revenues, 41.6% higher than in 2002.

The output of steel and rolled products increases more than 30%, primarily due to the consolidation of new units in North America and to the operation at full capacity of the Ouro Branco (state of Minas Gerais) mill.

Investments in technological upgrades and the expansion of the units in the Americas total US$ 294.7 million to meet the growing demand for superior quality products.

The acquisition of iron ore extraction rights in the state of Minas Gerais, Brazil, for US$ 30 million ensures more reliable supply of this important input over the long-term.

The acquisition of the pig iron producer Margusa (state of Maranhão, Brazil) increases Gerdau's annual installed capacity of solid pig iron by 200 thousand metric tons. Pig iron is a major raw material for the production of steel in electric furnaces. The new unit's main advantage is its cost-efficiency, primarily due to its strategic location, which facilitates service for the mills in northeastern Brazil and North America.

Since Q4 2003, Gerdau Ameristeel, responsible for the Group's operations in Canada and the United States, has shown a trend towards improved performance and greater balance between raw material costs and steel prices.

In Brazil, the listed companies Gerdau S.A. and Metalúrgica Gerdau S.A. pay stock dividends to shareholders, issue shares and carry out a reverse split operation, increasing liquidity in the capital market.

A new payment schedule is established for dividends and interest on capital stock, which is altered from a semi-annual to quarterly basis. The anticipation of payments gives shareholders faster access to Gerdau S.A. and Metalúrgica Gerdau S.A. results.

Support for social projects to improve the quality of life of local communities exceeds the 100 mark for initiatives in 2003.

Investments of US$ 30.8 million in environmental protection strengthen eco-efficient practices.

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