NEW DELHI Brazilian
steelmaker Gerdau SA is confident that U.S. economic growth
will be sustained in 2013, according to chief executive officer
André B. Gerdau Johannpeter.
Despite worldwide economic
uncertainty and a global steel market that is in oversupply,
there is room for expansion efforts in certain regions as long
as it is tailored to those markets, Johannpeter told
AMM on the sidelines of the World Steel Association
(WorldSteel) annual conference in New Delhi.
One of the regions in which the
steelmaker expects to see continued recovery is the United
States, where the company is on track with plans to upgrade and
expand its special-bar-quality (SBQ) operations to feed into
the automotive market.
Johannpeter said he has faith in
the countrys continued recovery and the growth of its
manufacturing sector. "Its not a quarter recovery: You
have to look long-term." He said he expects the results of the
presidential election next month to eliminate some uncertainty
in the short-term.
However, even as the company
moves forward with expansions and upgrades at existing mills,
the companys plans for a greenfield steelmaking facility
in the United States remain in "preliminary" stages, the
company said Wednesday.
While the greenfield project
might not be under way anytime soon, the company has resumed
its joint-venture project with Aceros Corsa SA de CV to build a
steelmaking facility in Mexico, which is expected to produce 1
million tonnes of steel and 700,000 tons of structural profiles
amm.com, Aug. 3).
"Our project in Mexico is a sign
were seeing the recovery," Johannpeter said, noting that
the facility will feed the U.S. and Canadian markets as well as
Johannpeter said Gerdaus
expansion strategy involves selecting not just geographic
regions that make sense, but also key markets within those
regions. For example, Gerdau is looking to move up the value
chain in its home country with a plan to produce flat products.
"Today we export slabs, we supply the domestic market," he
said. "Were adding value to our mix."
The expansions in Brazil include
upstream moves as well. "Were going to get into the
mining business in Brazil," Johannpeter said, noting that the
company is still looking for a partner on that project (
amm.com, May 3).
Asked about plans to manage raw
materials in the United States, Johannpeter said the company
has a "good position" in scrap processing and plans to continue
investing in its existing yards.
As for expansion outside the
Americas, Gerdau is ready to ramp up its rolling mill in India,
the companys first operation in Asia. "We have the mill
built," Johannpeter said, noting that he visited the
planta joint venture with Kalyani Groupbefore
arriving in New Delhi for the WorldSteel meeting. "Were
going to roll steel by year-end."
As for 2013, there will be
continued growth in steel consumption in Asia and the Americas,
even if that growth is not as strong as had been expected or
hoped, he said. "Wed all like China to grow by
double-digit growth again. But if it grows 7 or 8 percent,
its still good growth. This is growth. Its not