Gerdau forecasts savings of US$60mn with Acominas integration

Brazilian long steelmaker Gerdau (NYSE: GGB) expects the incorporation of local subsidiary Acominas will generate savings of US$60mn over five years, the steelmaker's chairman Jorge Gerdau Johannpeter told journalists Tuesday. Speaking at the Latin American Iron and Steel Congress in Rio de Janeiro, Johannpeter said the official announcement will be made on Thursday, November 6. With just one entity operating in Brazil, economies will come from integrating operations, administration, financial expenses and taxes, he said. The amount of savings is greater than the 109mn reais (US$38.2mn) local analysts had forecast in June when the Porto Alegre-based group announced the incorporation plans. The Acominas plant will be better integrated into the administrative lines of the Gerdau group, which operates nine other mills in Brazil. Few changes on the sales side are expected and Ouro Branco-based Acominas will continue to market its own products. But the sales divisions of Gerdau and Acominas will answer to the same management, company executives said in the past. Gerdau operates 23 plants in Brazil, the US, Canada, Argentina, Chile and Uruguay. It is the largest long steel producer in the Americas with installed capacity of 14Mt/y.