Siderperú to invest $1.4 billion for plant expansion

The Brazil-based and North Carolina-managed Gerdau SA Corporation, Latin America’s largest integrated long-rolled steelmaker, will invest $1.4 billion over five years in Peru to expand its Siderperú plant in the coastal city of Chimbote, state news agency Andina reported.

Siderperú’s Executive Director, Luiz Polacchini, said Monday the plant would increase output there by more than sixfold and boost exports to neighboring countries.

“Peru is a strategic country for Gerdau, being a market with great potential and great development possibilities. This project will consolidate the growth of Gerdau in the South American steel producing sector,” said André Gerdau Johannpeter, CEO.

“On a national level, Siderperú will be the leader in long and flat steel products, supplying the internal market and exporting, with preference, to the Andean countries,” added the Executive Director of Siderperú, Luiz Polacchini.

The expansion of the Siderperú plant, whose main client is Moly-Cop, a manufacturer of steel grinding balls for mills, will increase actual steel production of 450,000 metric tons per year to 1.5 million in 2011 and 3 million by 2013, daily El Comercio reported.

“This is very important because Siderperú will become one of the largest steel producers of South America and Gerdau’s second largest in the world,” said Gerdau President André Gerdau.

The money invested will also contribute to the instalment of modern equipment that rigorously respects environmental standards, Gerdau said.

Gerdau, which has been investing a great deal in recent years to increase capacity by expanding its industrial units and buying out its smaller rivals, is the leader in the production of long steel in the Americas and world leader in specialty long steel for the automotive industry. It has 46,000 employees and operations in the Americas, Europe and Asia, which add up to an installed capacity of 26 million tons of steel.

In 2006, Gerdau paid $101 million for an 83.3 percent stake in the Siderperú plant, which expects to generate more than 4,000 temporary jobs and 2,000 permanent positions over the next five years.

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