Brazil steel company invests $1.4 billion in Peru

Gerdau S.A. is a Brazilian steel company and it will invest US$1.4 billion in its Peruvian subsidiary. They hope that this will transform Peru into a regional powerhouse that can profit from Brazil's building room.

The investment will boost yearly production at Gerdau's Siderperu unit more than sixfold to 3 million metric tons by 2013 and this will enable the company to increase exports across Latin America and ultimately to Asia, according to Gerdau CEO Andre Gerdau Johannpeter. Gerdau acquired an 83-percent stake in Siderperu for US$203 million in 2006 and now that unit produces 450,000 metric tons of steel annually at its main complex in the coastal fishing town of Chimbote, which is about 17 percent of Gerdau's yearly output. The expansion will enable Siderperu to meet Peru's entire domestic steel demand. Johannpeter said that today, Peru must import half the steel it needs. The additional steel imports could eventually help close Peru's trade deficit with Brazil. The trade between the neighboring nations reached US$2.2 billion last year In 1901 Gerdau started off as a nail company and now the company operates in 10 Latin American countries as well as India, Spain, Canada and the U.S. and it has already pledged US$122 million to improve environmental standards at the Siderperu plant. Siderperu's workforce is expected to double to 4,250 and 4,000 temporary construction jobs will be created.