Brazilian steelmaker Gerdau has lifted its planned investment forecast to BRL3.5bn ($632mn) from BRL2.6bn after reallocating some postponed disbursement from its 2020 plan.
Of the total capex plan, the steelmaker has allocated BRL1.1bn or 31.4pc for technological expansion and modernization. The company had initially planned to invest BRl$2.6bn in 2020 but that amount was reduced to BRL1.65bn due to the COVID-19 pandemic and its potential effect on final sales. Thus the company’s 2020 capex outlay was lower than BRL1.75bn invested in 2019.
The company noted that its expanded outlay was a result of its strong business performance in Q4 2020 and early 2021 due to higher finished steel prices and stronger demand. The continuation of these factors is expected to support the additional capital investment in 2021.
Gerdau’s new rolling mill in Pindamonhangaba, São Paulo is slated to start in H2 2022 and will receive some of the allotted investment. The site operates a mini mill with 620,000mt annual crude steel capacity and is adding 400,000mt annual capacity to expand special quality bars for use in the automotive industry.
($1=BRL5.54)