OREANDA-NEWS. March 22, 2011. The governor of Rio de Janeiro, Sergio Cabral Filho, and the Chairman of Gerdau's Board of Directors, Jorge Gerdau Johannpeter, announced today, March 2nd, at Palacio Guanabara, investments of BRL  2.47 billion to increase the production of steel and rolled products at the Cosigua mill, located in the Industrial District of Santa Cruz. This plant's capacity of steel production will grow 50%, reaching 1.8 million metric tons per year. In addition, a new wire rod and rebar rolling mill with installed capacity of 1.1 million metric tons per year will be installed. Its implementation will be accomplished in two phases. Such investments meet the most stringent environmental protection standards and include the deployment of the necessary infrastructure for the expansion of the plant.

"We are investing in Rio to meet the future increase in the demand for steel in Brazil, driven by the growth of the Brazilian economy and the events of the 2014 World Cup and 2016 Olympic Games, which involve not only the construction and renovation of sports venues but also the expansion of the infrastructure related to airports, hotels, energy, and telecommunications," says the Chairman of Gerdau's Board of Directors, Jorge Gerdau Johannpeter.

"Rio de Janeiro is experiencing a unique moment. We are attracting new companies and stimulating the economy of Rio de Janeiro. Despite the global economic crisis, we never had some many new companies being established in our State before: there were 41,986 new companies last year compared to 26,261 in 2007. We also hit a record in the generation of formal jobs in 2010: 190,000 new jobs were created. The modernization of the public administration enabled the tax recovery of Rio de Janeiro.

Within this context, Gerdau is announcing investments in our state, increasing its production, generating employment, and contributing to the economic and social development of Rio de Janeiro," said governor Sergio Cabral Filho.

This investment will generate 550 permanent direct jobs and 3,000 indirect jobs. Moreover, at the peak of the constructions in 2012, approximately 1,700 temporary jobs will be created.

The expansion of the plant will be divided into two phases – the first one covers the period between 2011 and 2013 and the second phase extends from 2014 to 2016. The first phase includes the expansion of the melt shop production capacity, which will come into operation in 2012, and the beginning of the operation of the new wire rod and rebar rolling mill in 2013 with initial installed capacity of 600 thousand metric tons per year. During this phase, Gerdau will also install a new fabricated rebar facility for civil construction and a retail facility focused on the sales of steel products.

In phase 2, between 2014 and 2016, the new rolling mill will reach 1.1 million metric tons of annual installed capacity. At the end of this period, the rolling capacity of the Cosigua plant will reach 2.6 million metric tons.

The investment program also involves the expansion of the plant's dust removal system, which is highly efficient to capture the solid particles generated during steel production, and the enlargement of the industrial water treatment and recycling system. Currently, the plant has 3,200 filters installed in its dust removal system, which is five times more efficient than the requirements set by the Brazilian law. As a consequence of the plant expansion, the installed capacity of the equipment will increase from 1.5 million cubic meters per hour to 2.4 million.

Furthermore, 98% of the total water used in the mill is treated inside the plant and reused, and the remaining 2% evaporate during the manufacturing process. Gerdau's concern about soil preservation is expressed by the extensive work of by-product delivery to be used by other segments of the industry or by the steel industry itself, reducing its impact on the environment. Currently, about 80% of Gerdau's solid wastes are transformed into by-products.