Brazilian steelmaker Gerdau is considering building another steel plant in Mexico as it seeks to expand its footprint in the country.
The company started a feasibility study for the construction of a special steel unit that would have a production capacity of up to 600,000 metric tonnes (t)/yr, chief executive Gustavo Werneck said today.
The move follows an optimistic outlook for the country's automotive industry and increased nearshoring — where companies move production closer to the US to tackle supply chain snarls seen during the pandemic.
"Important players in the automotive industry, including current Gerdau customers, are expanding their operations to Mexico, which is becoming one of the most relevant countries in the production of automotive parts," Werneck said on a LinkedIn post.
He did not give financial details.
Gerdau's first quarter crude steel production in North America fell by 2.8pc, but it posted 3.3pc output growth in its special steel business — which includes operations in Brazil and US — mainly driven by automobile production in Brazil, it said.
Mexico's auto sales to the US were 0.9pc higher year-on-year in March and first quarter auto exports rose by 1.9pc from the same period of 2023.
Gerdau operates two mills in Mexico with a combined nameplate capacity of 1.5mn t/yr.
