Gerdau, one of Brazil’s largest steel producers, recently unveiled an ambitious capital expenditure plan exceeding $1 billion. This investment is set to be allocated to multiple strategic projects aimed at expanding production capabilities and enhancing operational efficiency. At the Gerdau Investor Day 2024, the holding company, Metalúrgica Gerdau, revealed that their total approved CapEx stands at $1.68 billion, with $621 million already spent and a further $1.06 billion planned for future investments up to 2027.
A significant portion of this investment, approximately 74.5%, is directed towards operations in Brazil, while North America is set to receive 21.2% of the funds. A noteworthy mention is the potential construction of a new special steel plant in Mexico, aimed at producing 600,000 metric tons annually specifically for the automotive sector. This initiative reflects Gerdau’s commitment to catering to the growing demands of the automotive industry, as companies increasingly seek high-quality special steels for vehicle production.
In North America, Gerdau plans to allocate $274 million to its Midlothian Steel Mill in Texas. This investment aims to boost production by an additional 250,000 metric tons per year. Currently, two-thirds of this capital is already being implemented. Furthermore, Gerdau is also investing over $80 million in solar power initiatives in Texas, highlighting the company's efforts to integrate renewable energy solutions into its operations.
In Brazil, several key projects are receiving attention due to their substantial investment requirements. The Miguel Burnier mining complex is undergoing an expansion to increase its iron ore production capacity from 1.2 million metric tons to 5.52 million metric tons per year. This ambitious expansion will require an investment exceeding $585 million, with around 50% of this amount already utilized to initiate the project.
Another significant investment in Brazil involves expanding the company’s rolling mills by 500,000 metric tons, with a planned expenditure of $320 million. This expansion aims to enhance Gerdau's production capabilities and meet the increasing demand for rolled steel products in various sectors, including construction and manufacturing.
Additionally, Gerdau is set to invest around $64 million in biomass projects, focusing on forestry initiatives to support sustainable practices within its operations. This move towards biomass reflects a broader industry trend towards adopting environmentally friendly processes, aligning with global efforts to reduce carbon footprints and promote sustainable resource management.
