Brazil-based Gerdau acquired Roanoke-based Cycle Systems Inc.
- June 28, 2013
The products of Brazilian-based Gerdau S.A. are an integral part of structures ranging from homes and shopping centers to hospitals and bridges. “They are part of power and telephone lines. They are raw material for automotive parts, and they can be found at work on the farm,” says Kimberly Selph, the company’s manager of external communications and public affairs.
Gerdau is the leading producer of long steel in the Americas and one of the largest suppliers of special long steel in the world. “We are a leader in mini-mill steel production and steel recycling in North America, with an annual manufacturing capacity of approximately 10 million metric tons of mill-finished steel products,” says Selph.
The company, which has a mill in Petersburg with 397 employees, acquired the operating assets of Cycle Systems Inc., a metal recycling company in Roanoke, this February. Cycle Systems has nine locations throughout central and western Virginia. The purchase supports the company’s goal to minimize costs “by having scrap sources closer to our steel mills,” says Guilherme Johannpeter, president of Gerdau’s North American long steel division. “It will be a great advantage for our mill in Petersburg and other nearby operations.”
Selph says the North American long steel division has a “diverse and balanced product mix,” which includes fabricated steel and flat-rolled steel as well as wire rod. The company’s North American operations represent 40 percent of its production volume.
Products made in North America are generally sold to steel service centers and steel fabricators or directly to original equipment manufacturers for use in a variety of industries, including commercial, industrial and residential construction; manufacturing; automotives and mining. Gerdau is currently supplying more than 12,000 tons of reinforcing steel for a $791 million runway expansion at the Fort Lauderdale-Hollywood International Airport in Broward County, Fla., one of the fastest-growing airports in the nation.
The company’s special steel division supplies special bar quality (SBQ) engineered steel bars to automotive and heavy truck industries around the world. The Petersburg mill makes products such as steel beams used in the civil construction and consumer products markets.
The company’s roots trace back to João Gerdau, a German immigrant who bought a nail factory in Porto Alegre, Brazil, in 1901. The company began manufacturing steel in 1948 and grew at a fast pace during the next several decades. Today it employs more than 45,000 workers worldwide — 10,000 are in the U.S. and Canada — and has a presence in 14 countries: Argentina, Brazil, Canada, Chile, Colombia, Dominican Republic, Guatemala, India, Mexico, Peru, Spain, U.S., Uruguay and Venezuela.
Doing business in Porto Alegre is similar to doing business in the U.S. because of the large European influence in the city. “There is a great sense of urgency, tremendous focus on the customer, and because it is our headquarters, there is a pride that goes into all of our products and services,” Selph says.
Brazil is the sixth-largest economy in the world and has the third-highest number of Internet users after China and the U.S., according to Selph. “From a technological standpoint, doing business is extremely easy,” she says. “Culturally, there tends to be a great emphasis on developing relationships prior to transacting business and a very strong focus on the systematic management of business processes.”
She stresses the importance of learning the language and the customs of the country. “You need to be aware that different regions of Brazil each have their own unique personality,” she says. “But as in all business interactions, mutual respect, win/win situations and adding value while operating with integrity are the key drivers.”
Porto Alegre, she adds, “is a beautiful place to visit, and the people, in general, are extremely friendly and welcoming.”
Economy in Porto Alegre
The capital of the Brazilian state of Rio Grande do Sul, Porto Alegre has one of the largest populations in Brazil and is considered an industrial center. The city’s economy depends on industries such as health care, information technology, shipbuilding and high-tech manufacturing. Large employers include Gerdau, supermarket chain Zaffari, media group Grupo RBS, technology company Dell Inc. and software company TOTVS. The city also is home to the Center for Excellence in Electronic Technology, established to develop chips for the semiconductor industry in Brazil.
Visiting Porto Alegre
A modern city located next to the Guaiba River, Porto Alegre has a European heritage. Attractions include the Piratini Palace with French-inspired architecture and Farroupilha Park with monuments, a double Triumph Arch, mini-zoo, market and sports track. The Rio Grande do Sul Museum of Art, designed by a German architect, houses a large collection of art. The city has an active nightlife and hosts the Porto Alegre Carnival each year. City monuments and the Central Market celebrate the area’s gaucho (cowboy) heritage.
Economy in Roanoke
Centrally located on the East Coast, the city of Roanoke serves as the business center for a large portion of western Virginia. Industries such as high-tech manufacturing, health care, finance, education and insurance are helping to fuel the local economy. Large employers in the city include Carilion Clinic, Kroger Mid-Atlantic, HCA Healthcare, Wells Fargo Bank, Advance Auto, Allstate Insurance, Yokohama Tire Corp. General Electric and UPS. Several companies such as custom fiberglass manufacturer TecTon Products, Atlas Cold Storage, which offers specialty warehousing and storage, and Optical Cable Corp. are expanding and/or creating new jobs in the area.
Situated in the Blue Ridge Mountains, the Roanoke Valley has a strong connection to the outdoors. The area has more than 22 miles of paved greenways and is adjacent to the Blue Ridge Parkway and Smith Mountain Lake. The Valley has a strong railroad heritage, which is showcased at the Norfolk & Western freight station housing the Virginia Museum of Transportation. The museum has the largest collection of diesel and steam locomotives in the country. Roanoke’s historic Farmer’s Market, with everything from produce to art galleries, is the oldest market in continuous use in Virginia. Other area attractions include the Taubman Museum of Art with modern, contemporary, American and folk art, and Mill Mountain Zoo, home to more than 170 animals.