Solid performers that buck the trend
Gerdau is the market leader in non-flat steel in Brazil and one of the most profitable companies in the region. Revenue and earnings should increase by 10.8% and 43.4%, respectively this year. It has a 45% share of the Brazilian market. Increasing demand from the construction industry in Brazil, to which 80% of output is devoted, places it in a good position for growth. But the key to its expansion is its aggressiveness and flexibility. Despite the economic slowdown this year in Brazil, Gerdau made a net profit of R165 million ($138 million) in 1998, 61% up on last year.
Part of its success springs from agile management. From the factory floor to the top there are only four levels of management. With 10,000 staff, Gerdau aims to combine the attentiveness to customer needs of a small company with the clout of a market leader. Gerdau also benefits from a sharp focus on its core business - its board has passed up several opportunities to invest in other assets.
Gerdau was formed by consolidation and is expanding through acquisition. Seven companies were joined in one operating company to form Gerdau.