Less In 2020 – Gerdau Will Reduce Investments In Special Steel Plants This Year

The Company Decided to Cut This Year’s Investments in Special Steel Mills, Considering the Covid-19 Crisis

For 2020, another company adopted investment cuts due to the coronavirus. This time, the company Gerdau reported the reduction, resulting from the drop in demand in some sectors, especially the automotive sector.

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According to Gustavo Werneck, the company president, “given these market uncertainties, we have become more conservative in project approvals and have halted ongoing projects.”

The amount cut for the year was R$ 1 billion, down from R$ 2.6 billion to R$ 1.6 billion. This adjustment implies the halt of the main investments that the company was making in the two largest special steel mills, one in Pindamonhangaba (SP) and another in the United States.

“These are investments to keep up with the technological evolution of the automotive industry and since there will certainly be a significant drop in vehicle sales this year, it gave us a little more time,” he said. “We reduced, but we believe that, in the medium term, there will be no impact on our ability to serve the market.”

The company adopted a 25% reduction in working hours to avoid employee layoffs. Salaries were reduced, some employment contracts were suspended, collective vacations were adopted, and maintenance stoppages were increased. All of this, according to Werneck, are measures available so that the company does not lay off workers. “There were no layoffs,” he maintained.