The Brazilian steel producer Gerdau will shut its Barão de Cocais plant, located in the southeastern state of Minas Gerais.
According to Gerdau CEO Rogerio Werneck, the move is part of a company strategy to search for more productivity, including the closure of outdated plants, such as Barão de Cocais, where the company sees high raw materials costs, lack of own iron ore production availability, and outdated level of technology.
The plant has a production capacity of 330,000 mt per year, using charcoal as reductant in the blast furnaces and consuming a significant volume of ferrous scrap.
The production of the unit will be replaced by another Gerdau plant, in Rio de Janeiro, the former Cosigua, which is receiving investments estimated at $40 million, destined to change the product mix of the plant with more value-added products, to serve the domestic market.
As previously informed, Gerdau is closing for revamping its Maracanaú plant, in the northeastern state of Ceará, while maintains inoperative the Charqueadas and Riograndense plants, due to the intensive rains that have flooded the state of Rio Grande do Sul.
Werneck was quoted by the local press as saying that the company has no plans to close other units in Brazil.