Form 20-F - Gerdau

devaluation, social instability and other political, economic or diplomatic developments. “See Item 10 D – Exchange
Controls”
ITEM 4.
COMPANY INFORMATION
A. HISTORY AND DEVELOPMENT
Gerdau S.A. is a Brazilian company that was incorporated on November 11, 1961. Its main executive office
is located at Av. Farrapos, 1811, Porto Alegre RS – Brazil, with telephone number: 00-55 (51) 3323 2000.
Gerdau began operating in 1901, with the Pontas de Paris nail factory in Porto Alegre, Brazil. In 1969, the
company changed its name to Metalúrgica Gerdau S.A., and is today a holding company that controls Gerdau S.A. In
103 years of activity, the Gerdau Group has made a seminal contribution to Brazilian industry.
Important Events in the Development of the Company’s Business
In order to compensate for the potential shortage of raw material immediately after the end of World War II,
Gerdau acquired Siderúrgica Riograndense S.A., a steel producer also located in Porto Alegre. In February 1948, the
Gerdau Group initiated its steel operations, which foreshadowed the successful mini-mill model of producing steel in
electric arc furnaces (EAF), using steel scrap as its main raw material. The Company also adopted a regional sales
strategy to ensure more competitive operating costs. Growth in its markets led the Company to install a second
Riograndense unit in the city of Sapucaia do Sul (in the state of Rio Grande do Sul) in 1957, consolidating the
Group’s vocation for producing steel. In 1962, steady growth in the production of nails led to the construction of a
larger and more advanced factory in Passo Fundo (in the state of Rio Grande do Sul). Gerdau is currently the world’s
largest nail manufacturer, with more than 1,000 items available to customers through 100,000 sales outlets.
In 1967, the Company expanded into the state of São Paulo, in the Southeast of Brazil, purchasing Fábrica
de Arames São Judas Tadeu, a producer of nails and wires. It was later renamed Comercial Gerdau and became the
Brazilian distribution channel for the Company’s steel products, with 68 branches and 5 flat steel service centers
strategically located throughout the country.
In June 1969, Gerdau expanded into the Northeast of Brazil, producing steel at Siderúrgica Açonorte in the
state of Pernambuco. In 1971 it began to build the Cosigua mill in Rio de Janeiro, initially as a joint venture with the
German group, August Thyssen Huette. Eight years later, Gerdau became the major shareholder of Cosigua, which
currently operates the largest mini-mill in Latin America. In December 1971, Gerdau acquired control of Siderúrgica
Guaíra, a pioneer steel producer in the state of Paraná. It also established a new company, Seiva S.A. Florestas e
Indústrias, to produce lumber on a sustainable basis for the furniture, cellulose and steel industries. Since then,
Gerdau has expanded throughout Brazil with a series of acquisitions and new operations, currently owning 10 steel
mills within the country.
In addition to its industrial units and warehouses, Gerdau operates 11 rebar fabricating facilities in Brazil. In
January 2003, the Group became the major shareholder in the Dona Francisca hydroelectric plant (in the state of Rio
Grande do Sul) taking a 51.8% stake in the overall capital of Dona Francisca Energética S.A.
Gerdau began to expand internationally in 1980, with the acquisition of the Laisa mill in Uruguay,
continuing in 1989 with the acquisition of the Canadian company, Gerdau Ameristeel Cambridge (formerly Courtice
Steel), located in Cambridge, Ontario. In 1992, Gerdau acquired control of Indac and AZA, in Chile, merging these
into a single company, Gerdau AZA, shortly afterwards. Over time, Gerdau increased its international presence by
acquiring units in Argentina and most notably, in North America – Gerdau Ameristeel MRM Special Sections and
Ameristeel. In October 2002, Gerdau carried out a reverse takeover, merging its North American assets with those of
the Canadian Co-Steel to create Gerdau Ameristeel, which is currently the second largest long steel producer in North
America.
After this merger between Gerdau’s North American assets and Co-Steel, the business names of the
companies in that region were changed.
On November 28, 2003, Gerdau S.A. transferred its directly and indirectly controlled operations in Brazil to
Açominas, which was renamed Gerdau Açominas S.A., albeit while maintaining its headquarters in Ouro Branco (in
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