Gerdau will invest BRL 250 million in Rio Grande do Sul

During the South Summit Brazil program, Gustavo Werneck presented the ambidextrous organization process accelerated since the 2014 crisis at the company, which is the largest steel producer in Brazil and one of the main suppliers of long steel in the Americas and special steel in the world.

“That was when we started a cultural transformation at the company, as a way of reaching the capacity to go to the limits of Gerdau’s performance in its traditional businesses so that we could finance new and innovative projects. We could not implement these changes without results. It is a long road, but they are happening”, he emphasizes.

The transformation is represented by the so-called Gerdau Next, which is divided into four clusters: construtechs, mobility, sustainability and artificial intelligence. According to Werneck, at least 2,400 companies and potential innovations are scanned to be implemented in Gerdau’s traditional operations and new businesses.

“We are not an investment boutique. We operate in the areas in which we have expertise and, based on the company’s internal transformation, we encourage the development of innovations. Today, for example, in Ouro Branco (MG), we have implemented 5G technology throughout the unit . When they arrive at the company in the morning, the executives can, using the algorithm, detect where there is a greater possibility of accidents and act quickly to eliminate this possibility. The result is better productivity and reduction of losses”, he points out.

And, even having ended 2022 with a historic record of BRL 82.4 billion in net revenue, and an adjusted EBITDA of BRL 21.5 billion, Werneck reveals that Gerdau calculates that it has a percentage of inefficiency _ losses in processes _ of up to 20% of EBITDA.

“We’re talking about R$ 4 billion in potential to realize. And it’s precisely the innovative and creative processes that will lead us to improve our performance”, he says.

Founded 122 years ago in Porto Alegre as a nail factory, Gerdau now has 32 units in 10 countries and almost 30,000 employees.

 Investment:

BRL 250 million

 Stage: Running

 Company: Gerdau

 Cities: Charqueadas and Sapucaia do Sul

 Area: Industry

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Investments in 2022:

BRL 200 million

Jornal do Comércio: How does the investment of BRL 250 million, added to the BRL 200 million for 2022, relate to the process innovations presented at the South Summit?

Gustavo Werneck: Our Charqueadas plant, basically, throughout this investment in modernization, will be transformed into the state of the art of everything we can have in terms of special steel producing plants. I would say that Charqueadas today concentrates our great technological center of special steels for the automobile industry. That’s where we’re going to find all the technology we need to support the transition in the Brazilian automobile industry. RS is absolutely relevant for us in this sector and, considering the transformations that the company has promoted, the contributions in Sapucaia and Charqueadas respond to our great focus on making our processes more robust.

JC: What is the role of Rio Grande do Sul in this innovation arm, Gerdau Next?

Gustavo Werneck: The Charqueadas Plant connects with this concept of ambidexterity in a very intense way. In the mobility cluster, we foster not only partnerships with our traditional customers, but also new businesses. It is here that one of the main examples of new businesses related to mobility is located, in partnership with Randon, called Diante, a partnership between two companies from RS to create a business that did not exist. So, a company focused on renting heavy equipment and trucks, which transcends steel production technology. It is just the beginning of new partnerships that Gerdau Next can develop here in Rio Grande do Sul.

JC: How do you apply this culture change with quick results?

Gustavo Werneck: We want to be one of the most sustainable steel producers in the world. Since we started this transformation and set this goal, I realized that, as the company’s CEO, I facilitate this process. More and more I believe that culture comes before strategy. Because things change so quickly, it’s no use coming up with a strategy and a month later things change. Culture is what creates the environment for us to progress quickly. In practice, I’m talking about improving our listening skills, encouraging more collaboration and tolerance for error. An environment is created where, in fact, we can use people’s creative potential to the fullest, an environment of autonomy.

JC: You speak of an inefficiency gap of BRL 4 billion in a year of record revenue for the company. How is this interpreted in everyday life?

Gustavo Werneck: It’s a gap, the difference between anything you do in your personal or business life and what you’d like to be in the future. We should all make plans. When we look at the performance of traditional Gerdau and the inefficiencies that we can capture, as we move forward in the implementation of innovations, we realize that we could be with a greater result. That’s why we are investing in tools that allow us to tackle inefficiency more quickly

JC: Today, 15% of production between Sapucaia and Charqueadas is for export. At what level does the steel produced here compete in the international market?

Gustavo Werneck: Brazil is missing a great opportunity to encourage exports. I have 115 people here in the tax area and in the United States, seven. This shows the size of the tax confusion that exists in Brazil. Within the walls of our Brazilian plants, they are very competitive, and produce with a quality equal to any steel producer in the world. The big issue is the problems outside the walls of the units, mainly logistical and tributary. When we eliminate in Brazil this inefficiency of what is outside our walls, then we will be able to compete and increase exports.