Form 20-F - Gerdau

Armafer Serviços de Construção Ltda. was acquired in March 1993 and is currently a subsidiary of Gerdau Açominas
S.A., providing cutting and bending services for long steel products for the civil construction sector. It has 11
branches throughout the country.
Gerdau Laisa
In 1980, the Company acquired the Laisa mini-mill, in Uruguay. Gerdau Laisa has been profitable in past
years, and is the only long steel producer in Uruguay. Gerdau Laisa has annual production capacity of 70,000 tons of
crude steel and 72,000 thousand tons of rolled products. Production statistics are based on Gerdau Laisa’s sales plus
Uruguayan imports. Gerdau Laisa claims to supply 93% of rebar demand in Uruguay.
Gerdau AZA
In 1992, the Company acquired the AZA mini-mill in Chile, with Gerdau AZA’s second mill beginning
operations in January 1999. The two units, Renca and Colina, have combined annual production capacity of 440,000
tons of crude steel and 465,000 tons of rolled steel. The difference in the output of crude steel and long rolled
products is due to the fact that Gerdau AZA still operates an old profile rolling mill equipment at the Renca unit,
which was not decommissioned following the start-up of the new plant in 1999. Although no official statistics are
available in Chile, Gerdau AZA believes its share of the domestic long steel market of rebars to be around 50%.
Sipar
In December 1997, Gerdau entered the Argentinean market through Sipsa, a rolling mill with production
capacity of 68,700 tons per year. In May 1998, Gerdau signed an agreement to acquire one third of the total equity of
Sipar, another Argentinean rolling mill, in exchange for one third of Sipsa’s capital stock. Gerdau has two rolling
mills in Argentina, holding a 71.8% stake in Sipsa and a 38.2% stake in Sipar. More recently, Gerdau carried out a
financial and corporate restructuring of its operations in Argentina to adapt these to the new economic environment in
that country. Gerdau currently holds a 38.2% stake in Sipar, of which Sipsa is now a full subsidiary. The Company
expects that these measures will maximize business opportunities, improve results and minimize the impact of the
fluctuation of the Argentine peso against other currencies.
Gerdau Ameristeel
In September 1999 Gerdau acquired 75% of Ameristeel (Florida) from Kyoei Steel Ltd. of Japan. At that
point, Ameristeel operated 4 mills on the East Coast: one unit in Florida, two in Tennessee, and one in North
Carolina. In 2000, Gerdau acquired an additional 12% stake from Kyoei, increasing its stake in Ameristeel to 87%. In
December 2001, Ameristeel acquired a steel mill located in Cartersville, Georgia.
In October 2002 Gerdau merged its North American assets, i.e. Ameristeel and its two Canadian units with
Co-Steel, to create Gerdau Ameristeel.
Gerdau Ameristeel has nominal annual capacity of 5.9 million tons of crude steel and 5.5 million tons of
rolled products and is the second largest producer of long steel in North America. Since the completion of the
operation, Gerdau Ameristeel’s shares have been traded on the Toronto Stock Exchange under the ticker symbol
GNA.TO. This transaction combined complementary operations, resulting in an improved product mix and a
consistent growth platform that allows the Company to compete for a leading position in the North American steel
industry.
Other Businesses
Seiva S.A. – Florestas e Indústrias
Seiva was incorporated on December 29, 1971 to implement reforestation projects in accordance with Decree
N o . 1,134/70. Seiva’s 55 employees (as of December 2003) carry out the development, implementation, and
maintenance of reforestation projects. The Company also owns pine forests.
Dona Francisca Energética S.A.
Dona Francisca Energética S.A. (DFESA) consists of an operational hydroelectric power station with
nominal capacity of 125 MW, located in the center of the state of Rio Grande do Sul.
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