Brazilian integrated steelmaker Gerdau has increased its Capex guidance to BRL 3.5 billion ($624.8 million) for 2021, according to an investor presentation obtained by SteelOrbis.
Gerdau said it upgraded its Capex guidance for 2021 from BRL 2.63 billion ($470.7 million) due to the company’s improving prospects in Q4 2020 and early 2021.
“Now, we are making this adjustment for 2021, since our investment capacity is directly related to our free cash flow generation, whose performance has been very positive,” said CEO Gustavo Werneck.
Werneck said Gerdau will spend $120 million to set up a new continuous casting rolling mill at its Pindamonhangaba mill, located in the city of same name in the state of São Paulo. The new rolling mill should start up by H2 2022, and it is expected to help meet Brazil’s automotive industry needs to produce hybrid and electric cars.