he expansion of Gerdau Açominas, the Group’s largest Brazilian steel mill, is mobilizing the entire region of Alto Paraopeba (state of Minas Gerais). This is because local economic development is directly linked to the expansion of the unit, the largest company in the region. In 2007, the mill’s installed capacity will be increased from 3 million metric tons to 4.5 million metric tons, representing investments of US$ 1.2 billion and 1,500 new direct and indirect jobs after the new structure begins operations.

In accordance with its principles of transparency, Gerdau Açominas held 22 meetings with the community to present the benefits of its expansion. Public authorities and opinion shapers – such as mayors, city council members, judges, teachers, school principals and university students – participated in the meetings. Gerdau installed a toll-free hotline from November 2005 to March 2006 for residents from the region to ask questions. It also distributed 9,000 leaflets on the expansion projects to the communities neighboring the steel mill and produced a special television program that was aired by the local broadcasting station.

In April 2006, the plant was licensed by the State Environmental Policy Council (Copam) to install the new equipment.

Over an 18-month period, the unit expansion projects will generate 5,000 jobs. At the peak of the process, 8,000 people will work on the project, 60% of which will be local labor, including masons, assistants, carpenters, electricians, foremen and painters. This is because Gerdau Açominas is urging the service providers to hire people from the cities of Ouro Branco, Conselheiro Lafaiete, Congonhas, Ouro Preto and other nearby areas.

National Employment System (SINE) stations were set up in the cities of Ouro Branco, Conselheiro Lafaiete and Congonhas. There, the contractors will have easy access to a database of professionals wishing to work on the mill expansion projects. Gerdau Açominas also put together a multifunctional team to work together with SINE employees in the inspection of work contracts signed between the contractors and hired personnel.

The management of such a large number of people is a major task. It could mean a population increase of approximately 28% in Ouro Branco, which would in turn affect the demand on public services. Anticipating this need, Gerdau Açominas plans to provide new transportation lines with 196 buses to carry the people daily to and from the various municipalities where they live. Meals will be provided by Gerdau Açominas itself in line with the most rigorous quality controls, and the Ouro Branco Foundation Hospital, managed by the unit, will guarantee care to all those working on the projects.

The demobilization of workers during the project will be gradual and supported by training programs designed to increase employment rates in the region.