Gerdau Summit, the joint venture formed last year by Gerdau S.A., Japan Steel Works, Ltd., and Sumitomo Corporation, has been launched now, and expects to be producing forged parts for wind-power projects by early next year. Gerdau, the Brazilian steelmaker that holds a 59% stake in the venture, recently reactivated a rolling mill operation in Pindamonhangaba, where the forging operation will be built.

The venture was announced in early 2016 and “registered” in January, following agreement on terms and conditions. At that time, it was noted that Gerdau produces hydraulic forged steel bars and custom parts, but is gaining the expertise of JSW to cast and forge products for power generation, while Sumitomo will contribute marketing and sales experience in the wind- and renewable energy fields.

Gerdau Summit represents a total capital investment of about $90 million for the partners, who plan to product up to 50,000 metric tons/year of forgings. It should create approximately 100 new direct jobs in Pindamonhangaba, according to Gerdau.

Sumitomo, which holds 39% stake in Gerdau Summit, is the holding company for Sumitomo Heavy Industries, a designer and builder of mechanical forging presses. Japan Steel Works, with a 2% stake, manufactures of large-dimension castings and forgings for industrial machinery, as well as power generation systems.

The partners have not indicated any specific products, but a release by Gerdau noted the joint venture would increase by 70% its production of forgings for the wind sector, castings and forgings for other segments, and rolling cylinders.

The strategy for the investment to capitalize on Brazil’s effort to expand its wind-energy capabilities, increasing total electric power generated by wind to 11% (or 18.7 GW) by 2024 (from 7%, or 10.74 GW currently.) The Brazilian government is offering to subsidize new wind-power generation projects, and also is promoting domestic manufacturing of the related systems and components.  

Brazil has about 430 wind farms operating today, with 330 more forecast to be built by 2020.

“The alliance between Gerdau, Sumitomo and JSW will allow us to grow together, share good results and contribute to the development of a sector that generates clean and sustainable energy," stated Guilherme G. Johannpeter, Gerdau’s executive vice president, Special Steel and Long Steel, South America.