Jorge Gerdau Johannpeter is elected Person of the Year by the Brazilian-American Chamber of Commerce

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1 Issue 32 - Year 02 Read breaking news about the Gerdau Group in the Americas. Enjoy! Highlights» Jorge Gerdau Johannpeter is elected Person of the Year by the Brazilian-American Chamber of Commerce» Gerdau Aços Especiais Piratini increases its annual production capacity to 500,000 metric tons in Brazil» Demand for Gerdau's perpetual securities reaches US$ 3.5 billion» Gerdau AZA is chosen as one of the best companies to work for in Chile» Gerdau employees help out the hurricane Katrina victims» Gerdau acquires control of Sipar» Gerdau products help preserve ecological station in the south of Brazil» Gallatin Steel celebrates ten years of activity in the market» President of Gerdau Group is honored in Chile» The Gerdau Group opens another Prato Popular low-income restaurant in the state of Paraná Jorge Gerdau Johannpeter is elected Person of the Year by the Brazilian-American Chamber of Commerce The president of the Gerdau Group, Jorge Gerdau Johannpeter, received the Person of the Year 2005 award from the Brazilian-American Chamber of Commerce, during a gala event held at the Waldorf- Astoria Hotel in New York City on October 5. For the past 36 years, the award has been presented to a Brazilian and an American leader who have made outstanding contributions to the economy and the advancement of business relations between the two countries. The chairman and CEO of Cargill, Warren R. Staley, was the American executive chosen to receive the award. Around 600 people attended the event, including José Sarney and Fernando Henrique Cardoso, former presidents of Brazil, in addition to the main executives of big Brazilian and American companies. The Gerdau Group started to operate in the USA in 1999 with the acquisition of Ameristeel. Today, the Group has 11 mills in the country. In the first semester of 2005, the revenue of the Group reached US$ 5.7 billion, and North America contributed with 43.3% (US$ 2.5 billion) of the total.

2 The President of the Gerdau Group, Jorge Gerdau Johannpeter (to the left on foot), receives the award from JP Morgan Executive, Jef Stanley (to the right on foot), with the special participation of the former Brazilian Presidents José Sarney (seated to the left of the podium), and Fernando Henrique Cardoso (seated to the right of the podium) Gerdau Aços Especiais Piratini increases its annual production capacity to 500,000 metric tons in Brazil The Gerdau Group has completed the expansion of the Gerdau Aços Especiais Piratini steel mill, which is located in the municipality of Charqueadas in the Southern Brazilian state of Rio Grande do Sul. The event to celebrate the new 500,000 metric ton annual production mark took place on September 21 and gathered some 500 people. The Group invested US$ 180 million installing equipment in the melt shop, rolling mill and in the areas of product finishing and shipping. This is the second time that the Charqueadas mill capacity has been doubled. The first instance occurred in 1997, when the mill's annual installed capacity for finished products reached 240,000 metric tons. The unit produces long steel primarily for the Brazilian and international automotive industries, which consume approximately 80% of its production. The president of the Gerdau Group, Jorge Gerdau Johannpeter, announced that Rio Grande do Sul will receive additional US$ 325 million in investments over the next eight years directed at the continuous modernization of the Gerdau Aços Especiais Piratini and Gerdau Riograndense unit, located in the city of Sapucaia do Sul. Of this total, US$ 105 million will be invested in the Charqueadas mill and US$ 220 million in the Sapucaia plant. President of the Gerdau Group, Jorge Gerdau Johannpeter (in the center of the photo to the left), and the Governor of Rio Grande do Sul, Germano Rigotto (in the center of the photo to the right), during the event for the mill expansion New mill facilities were visited by Gerdau executives and authorities

3 Demand for Gerdau's perpetual securities reaches US$ 3.5 billion In September, Gerdau S.A., a public company of the Gerdau Group in Brazil, concluded its first issuance of US$ 600 million of perpetual securities to be traded in the international market. Perpetual securities are securities with no fixed maturity date that, in Gerdau's case, may be redeemed by Gerdau on the fifth year, or on any quarterly interest payment date after that. The use of this new instrument of access to the international fixed income market by Gerdau is part of a set of operations conducted in the last few years, which included commercial papers, eurobonds and secured export notes. The demand for the papers, however, reached US$ 3.5 billion, about 12 times the US$ 300 million initial offer. This is the greatest demand ever for perpetual securities issued by a Brazilian company in the international market. "Such great demand is explained by Gerdau's history and prospects, which are soundly focused on steel production, strong generation of income in dollars, and diversified production in several countries," says Osvaldo Schirmer, Gerdau Group's executive vice-president and chief financial officer, who coordinated a roadshow in Asia and Europe to promote the papers to investors. These securities are being sold to individual investors and private banking companies in Asia (46%), Europe (32%), United States (20%) and Brazil (2%). The interest rate of 8.875% p.a. is the lowest among rates paid by any other perpetual securities issued by Brazilian companies, and interest will be paid on a quarterly basis. The operation was rated Ba1 by Moody's Agency, higher than Brazil's sovereign rating, and BB- by Standard & Poors and Fitch Ratings, the same as the current Brazil's sovereign rating. The operation was conducted in conjunction with HSBC and Citigroup, and the securities are registered with the Singapore Stock Exchange. Gerdau AZA is chosen as one of the best companies to work for in Chile Credibility, respect, impartiality and fellowship were the main aspects highlighted among the 35 best companies to work for in Chile. Gerdau AZA is one of them, and for the second consecutive year is among the 3 highlighted companies due to the high qualification of its employees. The survey is an initiative of The Great Place to Work Institute together with Capital magazine, and is divided into two parts. The first part, which represents 25% of the score, takes into consideration data submitted informed by the companies regarding their benefits, communication systems, remuneration and evaluation. The other 75% of the score is the result of input from more than 160,000 employees from the 170 companies who answered the survey. Gerdau AZA human resources manager, Regina von Brand, said "this recognition makes our organization proud and reflects our efforts aimed at developing of our employees." Human Resources Manager at Gerdau AZA, Regina von Brand (third from left), with the certificate that acknowledges the unit as one of the best companies to work for in Chile

4 Gerdau employees help out the hurricane Katrina victims The Gerdau Group formed a large solidarity network to help the victims of hurricane Katrina, which completely destroyed the south of the United States. In the tragedy, 84 Gerdau Ameristeel employees living in the state of Louisiana were affected, and more than half of them have lost their homes. In order to sooth the damage, Gerdau created the Gerdau Professionals Pro-Public Emergency Fund. With this initiative, employees voluntarily donated resources that will be used to rebuild their colleagues' houses. The company will donate the same value given by the employees which means that donations will be doubled. The solidary mobilization is already being noticed. In just two weeks of campaign, over US$ 57 thousand have been collected among Gerdau professionals who work in Brazilian and American units.

5 Gerdau acquires control of Sipar Gerdau S.A. acquired 40.49% of the capital stock of Sipar Gerdau Inversiones S.A., the parent company of Sipar Aceros S.A., a long steel rolling mill company located in the city of Perez, Santa Fe Province, Argentina. This acquisition and the 43.28% stake already owned by the Gerdau Group represent 83.77% of the total capital of Sipar Gerdau Inversiones S.A. The Gerdau Group will disburse US$ 40.5 million in the next three years for this additional stake. Sipar Gerdau mill in Argentina Gerdau products help preserve ecological station in the south of Brazil One of the most important ecological stations in Brazil is using Gerdau products. The company is donating its fencing product line to Estação Ecológica do Taim, which is located in the municipalities of Rio Grande and Santa Vitória do Palmar, in the state of Rio Grande do Sul. In order to protect an approximately area of 12 miles along road BR 471, Gerdau will supply the following products Welded Wire Fences, Steel Posts and Galvanized Wires. In addition to helping to improve the ecology because it does not use wood, this solution also protects animals. "In 1998 when Gerdau made another donation of this type, the road-kill mortality dropped from 300 a month to none," says Amauri de Sena Mota, who is in charge of the station. Gerdau's ecological solution is under Gerdau is also donating steel products for the implementation in an area with construction of a 15.5 mile long fence in the approximately 25 miles in extension station, between the Mangueira Lagoon and the sea. The following products are part of this donation: Pantaneiro Oval Shaped Wires, Galvanized Steel Posts, Cercafix Post-Spacing Wires, Galvanized Wires and Galvanized Staples for Fences. According to Mota, with the fencing, domestic animals such as local cattle will not be able to enter the protection area and compete with species protected by the reserve. Created in 1978, Estação Ecológica do Taim comprises 33,8 hectares of protected area and includes swamps, dunes, fields and lakes. There are a total of 236 species of birds, 21 species of reptiles, 20 species of mammals and 62 species of fish in the station. Some of these animals are at risk of extinction such as the yellow-throated alligator, but they are safer now, thanks to Gerdau materials.

6 Gallatin Steel celebrates ten years of activity in the market Gallatin Steel, a joint venture between the Gerdau Group and Canadian Dofasco, is celebrating. In 2005, the unit that is located in the North American state of Kentucky celebrated 10 years of activity in the market. The construction of the mill started in 1993, but it was two years later that the unit manufactured its first coil and the operation entered a commercial pace. From left to right: President of Gallatin Steel, Don Daily, and Lieutenant Governor, Steve Pence, during celebration of the unit's 10th anniversary About 500 people, among them employees, customers, and suppliers, celebrated by attending an anniversary lunch. Don Daily, president of the Company, celebrates: we are very proud of the business that we have become. Last year, Gallatin Steel produced a record 1.5 million tons of steel while ranking among the best steel producers in both quality and customer service. Also, Gallatin Steel recently placed fourth in the Best Places to Work in Kentucky competition. President of Gerdau Group is honored in Chile Two events held in September counted with the presence of the Gerdau Group president, Jorge Gerdau Johannpeter. The executive was one of the outstanding businessmen recognized by América Economia magazine, a publication that is distributed in 18 Latin American countries. The choice has been made for the past 18 years by the magazine editors, who are spread in five cities of the Americas: São Paulo, Santiago, Buenos Aires, Mexico City and Miami. The magazine also honored Jorge Gerdau Johannpeter with the Global View Prize, recognizing his perception of the business world beyond Brazil's frontiers. Mr. Johannpeter was also one of the lecturers at the XVI Plenary Meeting of the Board of Latin American Businessmen. He discussed the political and economic similarities and differences among the countries of the region and explained the importance of working together to face global competition were the highlights of the presentation. Johannpeter concluded: "the companies, the government and the third sector are fundamental bases for the creation of sustainable development in economic, social and environmental levels. The competition and the social stock that result from this process are responsible for the quality of life of the population."

7 The Gerdau Group opens another Prato Popular low-income restaurant in the state of Paraná Araucaria, in the metropolitan area of Curitiba, is the fifth Brazilian municipality to have a Prato Popular, a low-income restaurant that serves healthy, balanced meals to low-income populations at a cost approximately US$ 0.45 per person. The Prato Popular Restaurant, opened in September, will benefit the community of Jardim Arvoredo, one of the most underprivileged areas of the city. The Araucaria Municipal Government, the Brazilian Industry Social Service (Sesi), and Risotolândia, a private catering company, also support the project. The menu includes rice, beans, a side dish, a portion of red or white meat and a salad and contains approximately 1,300 calories. Children under seven eat for free. All the food is controlled by nutritionists and produced within the best food safety standards. The remodeling of the site chosen for the new restaurant, as well as the supply of equipment and utensils, was provided by the Gerdau Group. The company is also responsible for the difference between the real cost of the meal and the price paid by users. The local government granted the site and will pay for the maintenance of the venture, including light and water, in addition to hiring a social assistant to monitor the entire project. Sesi will manage user registration and implement training and job courses that will take place at the restaurant in between operating hours. Risotolândia will produce and transport the meals, which will then be prepared at a cafeteria installed 10 minutes far from the new Prato Popular. Low-income population will have healthy and balanced meals at a unitary price of approximately US$ 0.45 From left to right: Executive Manager at Gerdau Guaíra, Rubens Kuhl, President of Pastoral da Criança, Zilda Arns, and Director of the Gerdau Institute José Paulo Soares Matins