Special Steels India Business Unit
1. Gerdau Group 2. Special Steels Business Unit 3. India Business Unit
Global Presence Gerdau Profile • 111 years in business • Production facilities in 14 countries • 60 steel mills • Near 46,000 employees • Crude steel capacity of 25.3 million tons • Ranked 10 th in the world by 2010 steel output Show • 2 nd largest long steel producer in the world and Map Legend Hide the 1 st in the Americas
Company’s Philosophy Vision To be a GLOBAL ORGANIZATION and a BENCHMARK in any business we conduct Mission To CREATE VALUE for our customers, shareholders, employees, and communities by operating as a SUSTAINABLE steel business Values Be the CUSTOMERS choice SAFETY above all Respected, engaged and fulfilled EMPLOYEES Pursuing EXCELLENCE with SIMPLICITY Focus on RESULTS INTEGRITY with all stakeholders Economic, social and environmental SUSTAINIBILITY
110 Years in Business Expansion in Brazil Acquisition of 3 mills (Rio de Janeiro, Market Share Increase Minas Gerais and Bahia) - Diversification / downstream Acquisition of 1948: Construction of 2 Construction - Own distribution network Piratini 1 St mill acquisition new mills of a steel mill -Acquisition of one mill (Specialty steel) (Riograndense) (Pernambuco) (Paraná and Ceará) (São Paulo) Second mill in Acquisition of one mill Minas Gerais (Paraná) 1901: Expansion of 1 St operation : Entering in Riograndense Construction of a new mill (nail factory) Açominas (construction of 2 nd steel mill) (Rio de Janeiro) 1900 40 ’s 50 ’s 60 ’s 70 ’s 80 ’s 90 ’s 2000 Acquisition in USA (TAMCO) 1 St mill acquisition abroad (Uruguay) Acquisitions in USA (Chaparral, MacSteel) 1 St mill Acquisition Mills acquisitions in North America Entering in Europe (Chile, Canada, (Canada) Argentina and USA) and Asia (Spain and India ) Expansion in Latin America Expansion Abroad
2011 Top Steel Producers Million metric tons crude steel production 1º - ArcelorMittal 97.2 2º - Heibei Group 44.4 3º - Baosteel Group 43.3 4º - POSCO 39.1 5º - Wuhan 37.7 6º - Nippon Steel 33.4 7º - Shagang Group 31.9 8º - Shougang Group 30.0 9º - JFE 29.9 10º - Ansteel Group 29.8 11º - Shangdong Group 24.0 12º - Tata Steel 23.8 13º - United States Steel 22.0 14º - Gerdau 20.5 15º - Nucor 19.9 2011 16º - ThyssenKrupp 17.9 2010 17º - Evraz 16.8 2005 18º - Maanshan 16.7 19º - Benxi 2000 16.5 20º - Hyundai 16.3 Source: World Steel Association www.worldsteel.org
2010 Top Long Steel Producer’s Capacities Million metric tons long steel capacity 1º - ArcelorMittal 47.3 51.2 2º - Gerdau 19.5 22.6 3º - Evraz 14.7 18.7 4º - Tata Steel 10.7 11.1 5º - Nippon Steel 10.5 10.8 6º - Industrial Union of Dombass 10 10.1 7º - JFE 9.5 9.4 8º - Nucor 8.9 8.9 9º - Riva 8.8 8.6 10º - Celsa Group 8.2 8.6 Source: Steel on the Net www.steelonthenet.com
Products and End Users Products End Users • Billets, blooms & slabs • Housing • Merchant bars • Infrastructure • SBQ • Agricultural sector • Rebars • Automotive industry • Fabricated steel • Oil and gas sector • Shipbuilding • Heavy structural shapes • Wind power generation • Wire-rod • Mining • Wires • Other industrial sectors • Nails
Key Financial Figures 1 st Quarter 2011 2010 2009 2008 2012 Net Revenues (US$ million) 4,972 20,233 18,798 13,408 22,618 Net Income (US$ million) 215 1,199 1,471 577 2,832 Total assets (US$ million) 26,826 28,499 25,683 25,605 33,914 Total shipments (thousand tonnes) 4,725 19,164 17,363 13,987 19,118 Total Output (thousand tonnes) 4,940 19,623 17,852 13,509 19,599 EBITDA (US$ million) 545 2,658 3,114 1,999 5,488 EBITDA Margin (%) 11% 13% 17% 14% 24% Gross Margin (%) 12% 14% 18% 17% 26%
Investment Plan (2011 – 15) USD 6.05 billion in five years • Heavy plate rolling mill at Ouro Branco unit Investment USD 1.0 billion Installed capacity 1 million tons by the end of 2012 Goal grow in oil and gas, shipbuilding and construction sectors • Structural beam rolling mill expansion at Ouro Branco unit Investment USD 57 million Future capacity 700 thousand tons in 2011 • Commercialization of iron ore resources Annual Production Expansion of mining capacity to 7 million tons Goal Self sufficiency for 100% of Ouro Branco unit iron ore needs • Wire rod and rebar rolling mills in Santa Cruz unit Investment USD 1.5 billion Installed capacity Additional 600 thousand tons in 2013 Goal Participate in demand due to FIFA World Cup and Rio Olympics
Corporate Governance General Assembly Board of Directors Board of Directors Gerdau Executive Committee (GEC) Functional Processes Business Units
Board of Directors President Dr. Jorge Gerdau Johannpeter Vice-Presidents Germano H. Gerdau Klaus Gerdau Frederico C. Gerdau Johannpeter Johannpeter Johannpeter Counselors Affonso Celso André Pinheiro de Oscar de Paula Cláudio Gerdau André Gerdau Alfredo Pastore Lara Resende Bernardes Neto Johannpeter Johannpeter Huallem General Secretary: Expedito Luz
Corporate Governance General Assembly Board of Directors Gerdau Executive Committee (GEC) Functional Processes Business Units
Gerdau Executive Committee (GEC) ANDRÉ Gerdau CLÁUDIO Gerdau Osvaldo Burgos EXPEDITO Johannpeter Johannpeter SCHIRMER Luz CEO COO CFO Executive VP Manoel VITOR de Ricardo Giuzeppe FRANCISCO Mendonça Filho MASCHERONI Deppermann Fortes Executive VP Executive VP Executive VP
Corporate Governance General Assembly Board of Directors Gerdau Executive Committee (GEC) Functional Processes Business Units
Business Operations GERDAU Long Steel Brazil Special Steels North America Latin America North Latin America South Long and Flat Steel 34% 6% 34% 20% 6% Rebars Fabricated Steel Wire rod Merchant Bars SBQ - Bar SBQ - Wire rod Nails Billets, blooms & slabs Wires Heavy Structural Shapes Rolling Mill Rolls Hot Rolled Heavy Plates Hot Rolled Coils Forged and Cast Parts % of 2011 net sales
1. Gerdau Group 2. Special Steels Business Unit 3. India Business Unit
Organizational Chart GERDAU Long Steel Brazil Special Steels North America Latin America North Latin America South Long and Flat Steel 34% 6% 6% 34% 20% Mr. Mark Marcucci Special Steels and India VP Mr. Luis Colembergue Operations Brazil Spain USA India Mr. Joaquim Bauer Mr. Jose Jainaga Mr. Jack Finlayson Mr. Arvind Mathur % of 2011 net sales
Locations USA Spain China India Brazil Special Steels Profile • 12 steel mills in 3 countries + 1 joint venture steel mill under construction in India • Ranked 2nd in 2008 SBQ global sales • Largest supplier of SBQ to the automotive industry in the world 12 steel mills + 1 under construction • Installed capacity over 3.7 million metric tons of crude steel 11 downstream units • Near 8,100 employees 10 representative offices
20+ Years of Special Steel Expertise Expansion in Brazil 3,214 2967 Improvements in the 2,796 continuous caster at Construction Pirantini of a new rolling mill in Mordernization of Installation of new Acquisition of Pindamonhangaba melt shop at Piratini rolling mill at Piratini Aços Villares Control of 1,870 Installation of Increase in Aços Villares downstream Piratini mill production capacity of facilities at Piratini acquisition melt shop at Piratini Increase in rolling mill L1 capacity at Piratini 754 388 379 374 309 273 264 260 211 172 168 149 126 139 120 102 1990 1990 2000 2000 2006 2006 2008 2008 2010 2010 2012 2012 Entry in Entry in North Monroe Melt Shop Europe America Improvements Acquisition of Acquisition of Sidenor MacSteel Entry in India Kalyani Gerdau Steel Ltd. Established (JV Kalyani Group) US$ 1.5 billion in 2011 - 13 Expansion Abroad
Investment Plan (2012 – 14) USD 1.5 billion in three years • Special steel rolling mill in Brazil Investment USD 205 million Installed capacity 500,000 tons by the end of 2012 Goal Accompany growth of the automotive sector in Brazil • Improvement in melt shop with new continuous caster in USA Investment USD 67 million Future capacity Additional capacity of 200,000 tons by end of 2013 • Capacity expansion at 2 different mills in USA Investment USD 322 million Future Capacity Additional capacity of 400,000 tons by 2014 Goal Competitive special steel solutions to a fast recovering industry • Investments in Kalyani Gerdau JV in India Investment USD 169 million approved Future Capacity 300,000 tons/year Goal Strategic unit: first in Asia
Brazil General Info • Company Name: Gerdau • Steel Mills: 4 • Downstream Units: 0 • Representative Offices: 1 • Employees: 4,200 • Crude Steel Capacity (1,000 metric t) : 1,380 • Rolled Steel Capacity (1,000 metric t) : 1,340 • Rolling Mill Rolls Capacity (1,000 metric t) : 40 • Product Portfolio: SBQ, Stainless and Rolling Mill Rolls - Steel Mills - Representative Offices
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