Gerdau Summit, as the new venture is called, will manufacture and sell forged wind power generation products. Gerdau has a 59% stake in the project, with Sumitomo and JSW holding 39% and 2%, respectively. The companies are planning to invest 280mn reais (US$68.9mn) on new equipment for installed production capacity of up to 50,000t/y. The JV is based at Gerdau’s Pindamonhangaba mill in São Paulo and will supply parts for wind turbine towers starting in 2018, Gerdau said in a statement. Meanwhile, the mill is already producing forged and cast parts for the sugar and ethanol industry, and rolling mill rolls for the steel and aluminum industry. Brazil has around 430 wind farms in operation with combined installed capacity of 10.7GW. The country plans to increase the ratio of wind power in total power generation to 11% in 2020 from the current 7%.
Gerdau recently resumed a round bar mill at the Pindamonhangaba plant, where activities had been halted in 2015 due to lower demand from the local automotive industry. The plant has an installed capacity of 500,000t/y. All three mills at Pindamonhangaba are currently in operation, Gerdau said in the release.
In related news, Gerdau announced on Wednesday that it agreed to sell 50% of its stake in Colombian steel plant Gerdau Diaco to Putney Capital Management. Putney is already Gerdau’s partner in operations in the Dominican Republic. With this move, a US$165mn JV with combined installed steel production capacity of 674,000t/y will be created, consisting of Gerdau’s long-steel industrial units in Colombia. “The transaction is aligned with the process to optimize the company’s asset base with a focus on profitability and deleveraging,” Gerdau said. Gerdau is the largest long steel producer in the Americas.