Brazil's Nerve of Steel.

• Author: Luxner, Larry
• Position: Brief Article

ON JANUARY 16, 1901, German immigrant Joao Gerdau opened a tiny nail factory in the southern Brazilian state of Rio Grande do Sul--marking the birth of what would one day rank among Latin America's largest steelmakers.

These days, as Gerdau's heirs mark the company's one hundredth anniversary, Gerdau S.A. has much to celebrate. Not only is it the world's largest nail manufacturer, the family-owned conglomerate also ranks as Brazil's largest producer of long steel products and steel shapes for construction. In 1999 the company reported sales of $2.2 billion--up 47 percent from the year before--and profits of $198 million. While CSN is the market leader in flat products, Gerdau has 50 percent of the domestic market in long steel products, with Brazil representing 60 percent of company sales by volume and 75 percent by dollar value.

Overall, in 1999, Gerdau S.A. churned out three-and-a-half million tons of crude steel--61 percent of that from its Brazilian operations and 39 percent of it coming from subsidiaries in Argentina, Canada, Chile, Uruguay, and the United States.

President and chief executive officer Jorge Gerdau Johannpeter, a fourth-generation steelmaker, says he's proud of what he calls the "strong professionalism" that has characterized his family business since it began life as Companhia Fabrica de Pregos Pontas de Paris.

"I started at Gerdau when I was eighteen years old, studying at night and working during the day so I could learn the business from top to bottom," says the executive. "At that time, our capacity was sixty thousand tons a year. Now we have a capacity of seven-and-a-half million tons."

Gerdau runs the company along with brothers Frederico, Klaus, and Germano. Together, they employ 12,500 people worldwide, including 8,500 workers in ten steel mills throughout Brazil.

A visit to one of these mills, Gerdau Acos Finos Piratini, showed some 1,050 workers manufacturing rolled, forged, and...