North America
In 2006, Gerdau Ameristeel, the company
responsible for Gerdau Group operations in the
United States and Canada, recorded the best
financial and operational performance in its history.
Gerdau Ameristeel's production reached 6.8 million
metric tons during this period, up 8.1% on the
volume for 2005. This allowed the company to
surpass the growth of the North American (+3.8%)
and Canadian (+0.7%) steel industries, according
to data from the International Iron and Steel
Institute (IISI).
This result was mainly influenced by increased
demand from the civil construction and manufacturing
sectors, driven by the North American and Canadian
GDP growth of 3.3% and 2.7%, respectively. Gerdau
Ameristeel’s growth also resulted from investments
to optimize installed capacity, to produce new value
added products, and to consolidate companies.
Sheffield Steel was acquired in 2006 for US$ 187
million, including a debt of US$ 84 million. In addition,
Gerdau Ameristeel extended its operation range to
the U.S. West Coast through a joint venture with
Pacific Coast Steel, a major supplier of fabricated
reinforcing steel for civil construction in that country (see West Coast bound).
Other acquisitions also helped to increase
Gerdau Ameristeel’s competitiveness in the
United States. Callaway Building Products (state
of Tennessee), producer of fabricated reinforcing
rebar, contributed to strengthening the strategy
of providing higher value added steel products
for civil construction, the company’s main market.
In turn, the acquisition of Fargo Iron and Metal
Company (North Dakota) increased the capacity
to store and process scrap, a raw material for
the production of steel.
US$ 238.9 million was invested in the update and
expansion of industrial facilities, highlighted by the
modernization of the Whitby rolling mill finishing
area (Canada) and the new melt shop at Jacksonville
(United States). Resources were also made available
for the storage areas in Cartersville and Knoxville
(both in the United States) and the scrap processing
area in Jacksonville.
To maintain competitiveness, Gerdau Ameristeel
announced the deactivation of the Perth Amboy
(New Jersey, United States) melt shop at the end
of 2006. The rolling mill was kept operational,
producing approximately 500,000 tons of wire rod
annually. Perth Amboy is now supplied with billets
produced at other Gerdau Ameristeel plants.
In 2006, Gerdau Ameristeel developed new products
to strengthen ties with key customers and meet market
demands. One example is a new chemical composition
used in the manufacture of #18 Jumbo anchor bolts.
Heat treatment, which completes the process, allows
for improved quality and cost savings. These bolts are
used to secure electric power transmission towers. The
company developed this solution in partnership with its
customers and obtained a patent for this process.
Another example of innovation at Gerdau Ameristeel
was the launch of ZbarTM, a revolutionary solution
in steel to be used in bridges and other building
structures exposed to harsh weather and adverse
conditions. ZbarTM is a value added rebar product
coated with layers of zinc and polymers. The coating
protects the bars from corrosion and increases
the durability of the structures, which can last
up to 100 years in unfavorable environments.
Gerdau Ameristeel products were used in numerous
construction projects, hospitals, buildings, water treatment
stations, and bridges throughout North America.
Perspectives
The main challenges for Gerdau Ameristeel in 2007
will be to consolidate its market presence in the
long steel sector, increase its capacity to obtain and
process scrap, expand its product line and value
added operations, and expand its geographical
coverage westwards.
Gerdau Ameristeel’s outlook for 2007 is optimistic
and the company believes it can benefit from the
United States’ strong economic foundations.
