Gerdau has launched a new hot rolled steel production line in Brazil, increasing capacity by 230,000 tons per year to a total of 1 million tons. The $260 million investment aims to meet heightened demand, particularly in the automotive and machinery sectors. However, CEO Gustavo Werneck cautioned against potential import issues, urging governmental protective measures.
Gerdau, a prominent Brazilian steel manufacturer, has inaugurated a new hot rolled steel (HRC) production line at its facility in Oru Branco, Minas Gerais. This development, reported by SteelOrbis, aims to address the increasing regional demand for steel.
The newly commissioned line is set to enhance the plant’s production capacity by 230,000 tons annually, culminating in a total HRC output of 1 million tons per year. This expansion positions Gerdau to adequately fulfill the growing needs of its clientele, particularly those in the automotive sector and manufacturing of machinery and equipment.
The venture involved a significant investment of approximately $260 million, incorporating modernization of existing facilities along with the integration of advanced technologies. Such enhancements are purposed to boost production efficiency while minimizing environmental impacts.
Nonetheless, Gerdau’s CEO, Gustavo Werneck, expressed concerns regarding potential underutilization of the new line due to increasing steel imports, particularly from China. He asserted the necessity for government intervention, advocating for protective measures to curtail the influx of inexpensive foreign products before the month’s end.
The opening ceremony was graced by Brazilian President Luiz Inácio Lula da Silva and Vice President Geraldo Alckmin, signaling potential governmental endorsement for upcoming restrictions on steel imports. Notably, CEO Gustavo Werneck has hinted at the possibility of escalating production capacity in the United States rather than establishing a new facility in Mexico.
Previously, Gerdau had proposed the establishment of a new specialty steel plant in Mexico, projected to have an annual capacity of approximately 600,000 tons, requiring investments between $500 million and $600 million.
In summary, Gerdau’s new hot rolled steel production line in Minas Gerais marks a significant investment to bolster its production capabilities in response to rising steel demand. While this expansion aims to enhance competitiveness and address customer needs, concerns about increased imports from China could pose challenges. Collaboration with government entities may be essential to ensure the protection of local manufacturing.
Original Source: gmk.center
