Highlights. Issue 29 - Year 02. Read breaking news about the Gerdau Group in the Americas. Enjoy!

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1 Issue 29 - Year 02 Read breaking news about the Gerdau Group in the Americas. Enjoy! Highlights» Problem-solving meeting brings Gerdau Group representatives from North and South America together in Brazil» Annual Report and Social and Environmental Report Brazil 2004 may already be accessed on the internet» State-of-the-art equipment ensures productive efficiency at Gerdau São Paulo» Gerdau Ameristeel Knoxville inaugurates a new warehouse» Gerdau AZA product enhances safety of Chilean mining industry» Gerdau Aços Especiais Piratini presents technology in the United States» Latin American Executives Meeting Focuses on Social Responsibility» Gerdau wins 2005 Top Anamaco Award» Gerdau Group opens Prato Popular restaurant in northeastern Brazil» Gallatin Steel recognized for excellence in customer service» Gerdau opens fabricated reinforcing steel facilities in northern Brazil» Environmental preservation mobilizes Gerdau Ameristeel volunteers Problem-solving meeting brings Gerdau Group representatives from North and South America together in Brazil More than 320 Gerdau Group employees gathered in São Paulo in June with a special mission: to present their better solutions for daily production process problems. The Quality Improvement Story Teams are temporary work teams consisting of up to seven participants who use the analysis and problem solving method together with tools based on the Total Quality concept to resolve routine setbacks that affect production. Creativity was the great ally of the groups, which defied tradition during the presentations. The results were presented through theatre performances, films, television news programs, and music parodies. The effective blend of humor and technique surprised the company's president, Jorge Gerdau Johannpeter. intelligence and emotion united with methodology will make us invincible," he said. Despite the regional differences, a salient characteristic of the event was the integration to search for unique objectives and increasingly better results. The winners of the challenge were Gerdau Aços Especiais Piratini (Brazil), in first place, Gerdau Ameristeel Cambridge (Canada), in second, and Gerdau Cosigua (Brazil), in third. The Canadian unit team was also awarded the Distinguished Presentation prize by the audience for the most charismatic group.

2 Employees celebrate the result of the projects Annual Report and Social and Environmental Report Brazil 2004 may already be accessed on the internet The performance of the Gerdau Group in all its areas of activity is available on the internet. The Annual Report is the result of an integrated communication between the operations in six countries where the Gerdau Group acts, and highlights the main events in the Americas. The report ranges from the Group's strategic view and corporate governance to investments, sales and financial performance. The Social and Environmental Report Brazil presents its practices together with collaborators, communities, and concerning the environment. The publications were developed from the theme "Steel to Shape the World", which strengthens the Gerdau Group's commitment with sustainable development, that is the balance between the economic, social and environmental areas. All the information may be accessed at

3 State-of-the-art equipment ensures productive efficiency at Gerdau São Paulo Construction of the Gerdau São Paulo steel mill is entering a new phase. In early June, a processor known as the Mega Shredder to shred and clean scrap was installed. The equipment also separates ferrous from non-ferrous materials, ensuring better quality and productivity in the steel production process. The Mega Shredder is manufactured with state-of-the-art technology and has a processing capacity of up to 3,000 metric tons of scrap per day. Gerdau São Paulo is located in the municipality of Araçariguama and in the first phase will have an installed melt shop annual capacity of 900 million tons of steel and, at the rolling mill, 600 million tons of rebar. Separation of iron scrap is one of the advantages of the Shredder The equipment can shred and clean about 3 thousand metric tons of scrap per day Gerdau Ameristeel Knoxville inaugurates a new warehouse Some 620 metric tons of structural steel and over 150 metric tons of regular steel were used to construct the new warehouse at Gerdau Ameristeel Knoxville, located in the U.S. state of Tennessee. The Knoxville mill produced the rebar used in the construction of the warehouse. The new warehouse, which covers a 6,000-square meter area, represents an investment of US$ 8.3 million and has the capacity to store up to 35,000 metric tons of finished steel ready for delivery to customers. "This substantial investment in our mill will help keep us globally competitive and help ensure we better serve our customers' needs," affirmed Arlan Piepho, Knoxville's general manager. Chief Operating Officer of Gerdau Ameristeel, André Johannpeter (third from left to right), and CEO, Phillip Casey (fourth from left to right), with executives and authorities during the official opening of the warehouse

4 Gerdau AZA product enhances safety of Chilean mining industry Gerdau AZA, a steel mill located in the Chilean city of Santiago, has improved its main product for the mining sector. Saferock, a special type of screw designed to reinforce the rock walls of mining tunnels, is now even stronger. The product increases the safety of mines considerably, helping to avoid slides and reducing the effects of earthquakes and seisms. The Group launched Saferock during Exponor, the most important mining industry fair in Chile. The launch took place in June in the cities of Antofagasta and Calama, both important mining regions in the country, with technical lectures about the new product. Gerdau AZA booth at Exponor The product was improved to better serve the mining industry Gerdau Aços Especiais Piratini presents technology in the United States For the first time, a Latin American steel mill presented industrial technology demonstration at the International Symposium on Bearing Steels, held in the U.S. city of Reno. The Gerdau Aços Especiais Piratini mill, located in the southern region of Brazil, was featured. The mill demonstrated production technology it developed for steel bearings, used by the automobile industry and others. Steel bearings require rigid quality norms, and very few steel mills in the world are able to meet this demand. The event was sponsored by the American Society for Testing and Materials (ASTM). Employees Luis A. Colembergue Klujszo and Letícia Saraiva Ribeiro represented the Gerdau Group at the event

5 Latin American Executives Meeting Focuses on Social Responsibility The Gerdau Group president, Jorge Gerdau Johannpeter, presented practices for the sustained growth The fight against poverty and the need for companies to contribute to sustainable development in Latin American countries were the most widely debated issues at the third Latin American Executives Meeting, held in São Paulo during the month of June. "It is important for executives to develop their potential in the social area and in the fight against poverty," said Carlos Slim, the president of the Mexican telecommunications group Carso. The executives discussed common strategies for forming solid and competitive companies. The president of the Gerdau Group, Jorge Gerdau Johannpeter, participated in the meeting and presented the 104-year history of the company as well its practices to encourage sustainable growth to an audience for approximately 200 people. "We aim to operate in partnership with other organizations in an effort to optimize resources and results," Johannpeter said. "We encourage organized volunteer work among our employees and the community in addition to supporting more than 119 social projects in the Americas." Gerdau wins 2005 Top Anamaco Award The Gerdau Group was one of the big winners in the sixth edition of the Top Anamaco Award organized by the National Association of Construction Material Retailers (Anamaco). The award is one of the most important for the civil construction sector in Brazil. The Gerdau Group was highlighted three times in the category of marketing and sales: the campaigns for GG 50 rebar, the Gerdau roof nail and the Structural Engineering Talent Award. The GG 50 rebar campaign reinforced the concept of product quality, safety and practicality, using TV and trade magazine ads, sales outlet material, the Internet and internal communication. Certified by the National Institute of Metrology, Standardization and Industrial Quality (Inmetro), the Gerdau GG 50 is found in important construction projects, from small structures to the largest and most modern ventures in Brazil. The campaign targeted small construction companies with the slogan, "The rebar that is the master in your work." The media strategy had a national scope and the ads were aired on prime-time TV and during soccer games. The campaign for the Gerdau roof nail, used to fasten fibrocement and metal roofs, highlighted the product's important technical aspects, including the fact that it is the only nail with a welded head that is 100% galvanized and contains flexible rubber which ensures improved sealing of the roof by featuring UV protection and resisiting up to 80 Celsius, thus preventing drying up through exposure to the weather. The publicity material was highly flexible in nature, with the creation of a specific sales outlet material for each type of resale. The award also highlighted the Structural Engineering Talent Award, which recognizes talent and the importance of structural engineers. The Gerdau Group created the award with the support of the Brazilian Association for Structural Engineering and Consulting (Abece). Direct marketing tools were primarily used to announce the award, together with advertisements in trade magazines and support materials, such as banners and posters. In 2004, engineer Roberto de Oliveira Alves received the award for his work "Rodovia dos Imigrantes" (Immigrants' Highway), winning a trip to the World Of Concrete in Las Vegas, the largest civil construction trade fair in the world.

6 Campaign poster for the GG 50 rebar, direct mail for the Structural Engineering Talent Prize, and point-of-sale material of the campaign for the Gerdau roof nail Gerdau Group opens Prato Popular restaurant in northeastern Brazil In June, the Prato Popular opened its doors to the underprivileged in the city of Recife in the state of Pernambuco. The project provides low-income people with highly nutritious meals at a token price of US$ An initiative of Gerdau Açonorte, the Gerdau Group steel mill in the state, the project was made possible through a partnership with the Recife City Government, the Industrial Social Service (Sesi) and the food company, Puras. The restaurant serves 350 meals per day. The menu includes rice, beans, a side dish, meat and a salad. Children under seven eat for free. All the food is controlled by nutritionists and produced within the best food safety standards. The Gerdau Group remodeled the site chosen for the new restaurant and supplied the equipment and utensils. The company is also responsible for the difference between the actual cost of the meal and the price paid by the participants in the program. The local government granted the site and will pay for the maintenance, including electricity and water, in addition to hiring a social assistant to monitor the entire project. Sesi will manage participant registration and implement training and job courses that will take place at the restaurant during operating hours. Puras will produce and transport the meals, which will then be prepared at a cafeteria installed at Gerdau Açonorte, located just 10 minutes from the new Prato Popular. The Gerdau Group has three more Prato Popular restaurants in Brazil, two in the state of Rio Grande do Sul and one in the state of Ceará. By the end of the year, Prato Popular restaurants will also be inaugurated in the cities of Barão de Cocais (Minas Gerais), Divinópolis (Minas Gerais), Araucária (Paraná), Simões Filho (Bahia) and Rio de Janeiro (Rio de Janeiro). Executive Director of Gerdau Nordeste, André Felipe Reinaux (right), inaugurates the Prato Popular Restaurant with local authorities Recife community in the new restaurant

7 Gallatin Steel recognized for excellence in customer service Three different companies have recognized Gallatin Steel, located in the U.S. state of Kentucky, as their best supplier. Copperweld Corporation, the largest U.S. manufacturer of steel tubes for mechanical use, acknowledged Gallatin Steel as the supplier they most trusted for reliable deliveries. Gallatin, which supplies Copperweld Corporation with more than 27,000 metric tons of hot rolled steel per year, was the leader in the fourth quarter ranking last year. "During 2004, Gallatin Steel stood out from its competitors in terms of performance," said the unit's sales manager, Al Bandman. Gallatin, a joint venture between the Gerdau Group and Canadian steel manufacturer Dofasco was also at the top of the list for the Heidtman Steel unit located in Granite City. Gallatin is part of one of the largest networks of fabricated reinforcing flat rolled steel facilities in the United States. In addition, Worthington Cylinders, a multinational company that processes steel for the construction, automotive, aerospace and hardware industries, awarded Gallatin Steel the title of certified supplier for its ability to also delivery deadlines and for superior customer service in Gerdau opens fabricated reinforcing steel facilities in northern Brazil Comercial Gerdau is present in all regions of Brazil, including the state of Amazonas Another Gerdau Group service has come to the Amazon region. At the end of May, Comercial Gerdau opened a fabricated reinforcing steel facility in the city of Manaus. The facility supplies different steel products, including custom-made sheets, roof tiles, roof ridge, strips and blanks for customers in the region. Its production is focused on the industrial sector, especially electric/electronic, domestic appliances and motorcycle companies from the Manaus Free Zone, as well as the naval industry. There is already a Comercial Gerdau sales outlet in the space that offers an extensive line of steel products. The Group invested approximately US$ 854 thousand in the 4,000-square meter unit. The largest steel distributor in the country, Comercial Gerdau has 74 branches distributed throughout the entire Brazilian territory.

8 Environmental preservation mobilizes Gerdau Ameristeel volunteers The ecological awareness once again went beyond the walls of Gerdau Ameristeel, the company responsible for Gerdau Group operations in North America. In Canada, Gerdau Ameristeel Cambridge employees and their families adopted a stretch of a regional highway and a group of volunteers from the unit collects garbage along the 1.5-mile extension every six months. During the last clean up, the group collected 67 bags of garbage weighing more than 1,500 pounds. Gerdau Ameristeel Whitby, also located in Canada, was not far behind. Employees from the scrap recycling and grinding area mobilized the community to preserve a 1.5-mile beach near the unit. The team collected the equivalent of two dump cars of garbage that were discarded by the community in the site. Gerdau Ameristeel Whitby volunteers collected two dumptrucks of garbage At Gerdau Ameristeel Cambridge, volunteers cleaned a 1.5-mile stretch of highway