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Gerdau’s Billion-Dollar Strategy Brings Innovation and Scrap to Conquer the USA with Smart Steel
In February 2024, Gerdau announced a new investment cycle of R$6 billion, with execution planned for 2025.
The plan includes asset maintenance, digitalization of operations, application of artificial intelligence, and enhancement of energy efficiency in plants in Brazil and the United States.
Additionally, in November 2024, the company completed the purchase of Dale’s Recycling for US$60 million, strengthening the metal scrap supply chain.
The acquired company has five units in Tennessee and one in Kentucky, which reinforces the supply of inputs for Gerdau’s electric furnaces.
According to the company’s report, 71% of the steel produced already comes from recycled material, a percentage above the global average.
These initiatives confirm Gerdau’s commitment to sustainability and the circular economy on an industrial scale.
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Revenue Grows in the USA with Support from Trade Policies
In the first quarter of 2025, Gerdau recorded a 16% increase in net revenue in North America, as reported by Reuters in April.
Meanwhile, in Brazil, there was a contraction of 3.5%, directly impacted by lower demand and the economic scenario.
This growth in the USA is also due to import tariffs on foreign steel, maintained since the Trump administration.
These barriers, at 25%, favored companies with local production, such as Gerdau.
The company currently operates with approximately 70% of its installed capacity in the country.
Annual North American production is around 4 million tons, serving industrial and construction markets.
Decision on New Plant in Mexico Postponed to July
Gerdau’s president, Gustavo Werneck, announced that the decision on the new special steel plant in Mexico has been postponed to July 2025.
Originally, the decision was to be announced in December 2024, but the company chose to reassess the scenario.
According to him, if the studies indicate a higher return in the USA, then investments may be redirected to Michigan or even Arkansas.
Additionally, these facilities already have established infrastructure and therefore offer significant margins for expansion, which can optimize financial returns.
However, the project in Mexico, if approved, will require an investment between US$500 million and US$600 million, and the estimated annual production is 600,000 tons.
Financial Results Reveal Solidarity and Exceed Expectations
Despite a 9% drop in adjusted net income in the fourth quarter of 2024, performance exceeded estimates.
The result fell from R$732 million to R$666 million, according to a report by the company.
On the other hand, adjusted EBITDA for the first quarter of 2025 reached R$2.4 billion.
This amount exceeded analysts’ expectations of R$2.29 billion, according to data from Investing.
Furthermore, an analysis by S&P Global Ratings, published in October 2024, showed that financial leverage remains healthy.
The ratio of net debt to EBITDA is only 0.8x, reflecting strong financial control.
Gerdau plans to maintain annual investments of R$6 billion until 2027, including solar energy projects in Brazil and the United States.
Focus on Competitiveness, Governance, and Reliable Information
Gerdau maintains its strategy focused on increasing industrial competitiveness.
To this end, it relies on technological innovation, productive efficiency, and strengthening sustainability in operations.
Additionally, the company has reinforced governance practices, ensuring greater transparency and alignment with standards required by the industrial and financial sectors.
For this reason, internal control mechanisms have been refined, especially as they aim to ensure that the results disclosed accurately reflect its strategic actions.
Thus, the company avoids exaggerations, focusing on consistent data, realistic projections, and decisions based on technical planning.
In this way, these guidelines have guided Gerdau’s institutional positioning in relation to the market as well as society.
According to information from S&P Global Ratings, Reuters, and Investing, the company’s recent movements indicate a solid cycle of expansion with responsibility and clarity.
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