Wind JV by Gerdau, Japanese partners okayed by Brazilian govt

Brazil's Council of Economic Defense (CADE) has approved the joint venture (JV) between local steel producer Gerdau SA (BVMF:GGBR4) and Japanese firms Sumitomo Corp (TYO:8053) and The Japan Steel Works Ltd (TYO:5631).

The partners will jointly own a factory for the production of wind tower equipment, which requires about BRL 280 million (USD 81.3m/EUR 76.7m) in investments for the new machinery. The JV is to be at least 50% owned by Gerdau, while the participation of the other partners will be defined in the coming months, Gerdau said in a press release.

Located in Pindamonhangaba, Sao Paulo state, the plant should be up and running in 2017. It will produce tower components, such as the main shaft, shovel and tower bearings, an the JV will also supply components for the steel and aluminum industry. All in all, it will have the capacity to make up to 50,000 tonnes of such products annually.

Currently, Brazil has 400 wind parks with a prospect of adding 330 more by 2020, according the National Wind Energy Association (Abeeolica).

(BRL 1 = USD 0.290/EUR 0.274)

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