Standard&Poor's Ratings Services' ratings on Gerdau S.A. reflect the company's adequate geographic diversification through the Americas and an expanding specialty steel business, with very strong and growing market shares in Brazil and North America, respectively; the improved business profile of its North American operation; and our expectation that the company will follow a prudent acquisition policy in the long term that will not consistently jeopardize its improved capital structure. These positives are partly offset by Gerdau's exposure to the volatile and cyclical commodity long steel industry; an acquisitive growth strategy; and a sizable capital budget during the next several years to be invested in brownfield capacity expansions. Gerdau's business position is satisfactory and has been slightly enhanced by
