Gerdau: Brazilian steel industry under heavy tax and energy cost burden

The Brazilian steel industry's competitiveness is under great pressure, said André Johannpeter, president and CEO of Brazil-based steel producer Gerdau, during the 47th annual meeting of worldsteel (World Steel Association) held in Sao Paulo on October 7-9. Among the main challenges that face the Brazilian steel industry, according to Mr. Johannpeter, are a heavy tax burden which can reach as high as 54 percent, compared to 29 percent for US mills as an example, the higher exchange rate, costlier electricity and also higher transportation costs to ports, which are three times higher as compared to rates in the US.
 
Furthermore, André Johannpeter told steel producers from all over the world participating at the event that the gross national savings of Brazil stand at about 17 percent of its total GDP, compared to rates of 50 percent in China, 32 percent in Russia and 27 percent in India, adding, "In order to invest more in industry and infrastructure, we should save first and become wealthier." Comparing steel consumption per capita in Brazil, Mr. Johannpeter said that Brazil lags behind other developing economies. In 2012, he said, Brazil's steel consumption per capita was at 128 kg, compared to 93 kg in 2000. However, Turkey increased its steel consumption per capita from 189 kg to 382 kg in the period between 2000 and 2012, while the figure for China reached 477 kg in 2012, up from 98 kg in 2000.