Geographically diversified; Strong market share and cost position in Brazil; Increasingly benefiting from consolidation trends in North America; and Wide product scope in long steel products Cyclical and volatile industry; Concentrated in commodity-grade steel products; Traditionally acquisitive and projecting significant capital expenditures for the next three years; and Intermittent import competition and volatile performance in North America. The ratings on Brazil-based steelmaker Gerdau S.A. (Gerdau) reflect Gerdau's exposure to the volatile and cyclical commodity long steel industry, which is peculiarly vulnerable to import competition in North America and to demand swings in Brazil; an acquisitive growth strategy that may cause some peaks of financial leverage in the future (despite the currently very comfortable liquidity and debt profiles); and a heavy
