Brazilian steel maker Gerdau hikes 2010-14 capex plan to $6.3 billion

South America's largest steel maker Gerdau SA boosted its global investment plan for 2010-2014 by 16 per cent to 11 billion Brazilian reais (R$), which in US dollar terms is $6.3 billion from the earlier R$9.5 billion ($5.4 billion), spurred by increasing demand for the metal worldwide, especially in the emerging markets in the wake of waning recession.

Porto Alegre-based Gerdau is one of the world's largest steelmakers with a capacity of over 25 million tonnes from its plants in 14 countries spanning the Americas, Europe and Asia. The company is one of the major suppliers of speciality long steel in the world and reported a turnover of $15.2 billion in 2009.

Gerdau CEO Andre Gerdau Johannpeter said, ''2010 will be a year of growth for Gerdau, mainly due to the demand in emerging markets, such as China, Brazil and India, whereas Europe, the United States and Japan continue their process of gradual economic recovery.''

''We will continue to monitor the evolution of markets and to invest in order to meet the future growth in demand, according to our long-term vision'', Johannpeter further said.

Of the proposed R$11 billion investment, about 80 per cent will be spent in Brazil. Capex of around R$4.7 billion has already been approved, which includes R$3.5 billion for steel mills and R$1.2 billion in other investment.

The plan covers R$2.4 billion investment in two flat steel rolling mills and a hot-rolled coil mill in Ouro Branco plant in Brazil, a new rolling mill for rolls to cater to the needs of the construction industry at a cost of R$490 million, and a speciality long steel rolling mill for automotive industry at around R$350 million.