Gerdau Announces New Agreement For Heavy Plates Production; Shares Surge Higher

Shares of Gerdau SA (ADR) GGB were trading higher by more than 8 percent on Thursday after the company announced it has signed a technical cooperation agreement with Japan-based JFE Steel Corporation.

Gerdau, a Brazil-based producer of long rolled steel, noted in its press release that the agreement will "optimize the learning curve" of the heavy plate rolling mill, which is scheduled to begin production in July and has a production capacity of 1.1 million tonnes of heavy plates.

JFE Steel's consultants will advise Gerdau on how to improve its mastery of heavy plate production, which should accelerate advanced in its production process.

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Gerdau noted that by July of this year, the rolling mill should be producing a complete array of gauges.

"We selected JFE Steel Corporation because it is a world reference in technology for the production of heavy plates, as well as a leading global producer of the steel good," said André B. Gerdau Johannpeter. With the technical agreement, Gerdau will be able to quickly and effectively supply the market with high-quality products.