How Does Gerdau (Cosigua) Company Work?

How is Gerdau (Cosigua) driving steel recycling and production?

Gerdau entered 2025 as the Americas' top long-steel producer and Latin America's largest recycler, turning over 11 million tonnes of scrap into value-added steel and reporting consolidated revenue above 68 billion BRL.

Gerdau pairs large-scale electric-arc furnace production with circular scrap sourcing, renewable energy projects, and integrated logistics to serve construction, auto, and agriculture markets efficiently.

How does Gerdau (Cosigua) Company work? Explore competitive forces and strategic positioning in this concise analysis: Gerdau (Cosigua) Porter's Five Forces Analysis

Gerdau Cosigua operates a decentralized mini-mill model centered on Electric Arc Furnaces (EAF) and scrap-based feedstock, serving Southeast Brazil with long steel products and integrated logistics to reduce costs and lead times.

Decentralized mini-mill model

Gerdau Cosigua prioritizes proximity to scrap sources and customers, using EAFs for flexible volume control and lower emissions compared with integrated mills.

Core product portfolio

Primary outputs include rebar, wire rods, merchant bars and specialty steels for automotive and infrastructure, supporting robust domestic demand.

Supply chain and vertical integration

A widespread scrap collection network feeds EAFs while Gerdau Florestal supplies sustainable eucalyptus charcoal for Minas Gerais blast operations, enhancing raw-material security.

Distribution and customer reach

Comercial Gerdau operates over 70 distribution units nationwide, enabling fast delivery, technical support and tailored service across customer segments.

The Cosigua unit exemplifies Gerdau's operational strengths by combining recycling scale, EAF efficiency and localized logistics to serve infrastructure growth in Southeast Brazil while lowering CO2 intensity per tonne compared with integrated steelmaking.

Operational highlights and KPIs

Key metrics and strategic advantages that define the Cosigua business model and company structure within Gerdau's portfolio.

• Electric Arc Furnace-centered steelmaking reduces CO2 intensity versus blast-furnace routes; Gerdau reported group-wide intensity declines through 2025 initiatives.
• Extensive scrap network supplies the Cosigua furnaces, lowering raw-material costs and improving supply resilience.
• Vertical integration spans feedstock (Gerdau Florestal), production (EAF mills) and distribution (Comercial Gerdau with over 70 units), shortening lead times.
• Product mix focuses on long steel for construction and automotive, with annual capacities concentrated to meet Southeast Brazil infrastructure demand; see Growth Strategy of Gerdau (Cosigua) for more detail.

Gerdau's revenue mix in 2025 is concentrated across four divisions: North America, Brazil, Special Steels, and South America, creating geographic and product resilience that supports margins and cash flow.

North America Revenue

The North America Business Division contributed about 42% of net revenue in 2025, backed by U.S. infrastructure demand and higher-priced construction and merchant bar sales.

Brazil Business Division

Brazil operations provided roughly 38% of 2025 revenue, leveraging domestic market share and integrated recycling-based steelmaking to control costs.

Special Steels

Special Steels generate premium pricing via tiered product lines for automotive and aerospace, contributing to higher gross margins versus commodity rebar.

South America Division

South America accounts for the remaining ~20% of revenue, providing regional diversification and access to local infrastructure projects.

Product Sales

Primary monetization is through direct sales of steel products across construction, industrial and OEM channels, with volume-sensitive pricing tied to scrap and HRC spreads.

Value-Added & Services

Gerdau Next drives service revenue from sustainable building solutions and logistics tech, increasing recurring and higher-margin income streams.

The company also extracts secondary and non-metal revenue to enhance monetization and energy resilience.

Secondary Revenue Lines

Co-products, energy sales and recycling create incremental margins and reduce exposure to steel price cycles.

• Sale of slag and other co-products to cement and construction markets.
• Newave Energia joint venture selling surplus energy; targeted to support 20% of group energy self-sufficiency by 2026.
• Recycling and scrap trading integrated into the Gerdau steel production process to lower raw-material cost.
• Tiered pricing for specialty steels, boosting ASPs in automotive and aerospace segments.

For context on competitive positioning and market peers see Competitors Landscape of Gerdau (Cosigua) which complements this overview of Gerdau Cosigua operations, How Gerdau works, and Cosigua company structure.

Key milestones include a 2025 joint venture into energy and >BRL 6 billion invested in 2024–2025 for mill modernization and renewables, driving a target of 0.83 tCO2e/tonne by 2031 and reinforcing Gerdau Cosigua operations across steelmaking and recycling.

Decarbonization push

Gerdau set an emissions goal of 0.83 tCO2e per tonne of steel by 2031, roughly half the global industry average, supported by investments in energy and efficiency.

Major capital deployment

Over BRL 6 billion was allocated in 2024–2025 to modernize Ouro Branco mill and scale solar and wind capacity, improving Gerdau steel production process resilience.

Newave JV (2025)

The 2025 Newave joint venture secures long-term renewable supply and cost stability, strengthening competitive position in green steel and supporting Cosigua company structure integration.

Scrap network dominance

Control of the largest scrap recycling network in the Americas creates a sourcing moat; localized mini-mill strategy sustained higher utilization during early-2020s disruptions.

Digital and operational moves sharpened efficiencies and market access for Gerdau Cosigua operations, reinforcing its role in Gerdau manufacturing overview and Cosigua business model.

Competitive edge and measurable outcomes

Key strategic outcomes include improved efficiency, supply security, and premium positioning for sustainable construction markets.

• AI-driven predictive maintenance and scrap grading delivered a 15 percent operational efficiency gain across major plants including Cosigua and Midlothian.
• Localized mini-mill footprint enabled higher utilization versus long-haul-dependent rivals during supply shocks.
• Preferred supplier status for LEED-certified projects supports higher-margin product sales and brand strength.
• Energy integration via Newave reduces exposure to market volatility and lowers scope 2 emissions intensity.

For governance and values context see Mission, Vision & Core Values of Gerdau (Cosigua).

Gerdau (Cosigua) holds a top-30 global steel producer position and is the Americas’ leader in long steel, with >35% market share in Brazil for rebar and merchant bars; low-cost Chinese imports, carbon regulation and capex needs are key risks, while a shift to specialty products and decarbonization drives a positive outlook through 2027.

Industry position

Gerdau Cosigua operations rank among the world’s top 30 steelmakers and lead long-steel production in the Americas; Brazil rebar/merchant bars market share exceeds 35% supported by broad distribution and high customer retention.

Competitive dynamics

Margin pressure intensified in 2025 from low-cost Chinese steel exports affecting Latin America; competitors include regional mini-mill operators and global flat-steel exporters competing on price and scale.

Regulatory and ESG risks

Carbon taxes and tightening environmental standards in Europe and North America require sustained capital investment; compliance capex and technology upgrades are necessary to retain market access and avoid penalties.

Strategic response

Management emphasizes disciplined capital allocation, geographic optimization and a pivot to higher-margin specialty products and Gerdau Next services such as modular construction and sustainable logistics.

Financial and operational indicators in late 2025 show investments directed at energy transition and product-mix improvement, with North American renewables targets central to the plan.

Outlook & priorities

By prioritizing specialty steel, recycling efficiencies and renewable power, Gerdau aims to capture a green premium and improve margins while meeting emissions targets.

• Target: 100% North American operations powered by renewables by 2027
• Shift toward higher-margin specialty products and expansion of Gerdau Next modular/sustainable services
• Ongoing capex to meet evolving environmental standards in key markets
• Exposure mitigation vs Chinese export pressure via product differentiation and geographic optimization

For a deeper look at revenue streams, processes and the Cosigua company structure see Revenue Streams & Business Model of Gerdau (Cosigua), which complements this overview with operational and financial detail.