Gerdau Ameristeel Announces Suspension of Production and Mill Closure



    TAMPA, FL, June 8 /CNW/ - Gerdau Ameristeel Corporation (NYSE:   GNA; TSX:
GNA) announced today that it is suspending production at its Sayreville, New
Jersey steel mill and closing its rolling mill in neighboring Perth Amboy, New
Jersey due to lower demand for its products resulting from the downturn in the
economy. The company said these actions are expected to occur gradually over
the next several months. The company indicated that it would restart
operations at the Sayreville facility when business conditions warrant.
    The company is also entering into discussions with the United Steel
Workers regarding the potential closure of the Company's steel mill located in
Sand Springs, Oklahoma.
    The company will continue to offer its full range of products to its
customers throughout North America. Service to customers will be uninterrupted
and will be provided by production from Gerdau Ameristeel's extensive network
of steel mills in the United States and Canada. The Sayreville facility will
continue to carry a full range of products in inventory available for shipment
or customer pickup until production resumes.
    Mario Longhi, President and CEO of Gerdau Ameristeel commented: "This was
a very difficult decision that came after careful analysis and review of the
marketplace, our production capabilities, and the most cost effective
alternatives to meet the current and future needs of our customers throughout
North America during this unprecedented economic downturn. These actions
follow a series of steps the company has taken over the last nine months to
reduce its costs. We understand the impact that these decisions will have on
the lives of our employees and our communities, but unfortunately market
conditions mandated that these actions be taken at this time. The company will
make every effort to help displaced employees through this time of
transition."
    In connection with these actions, depending on the outcome of the Sand
Springs discussions, the Company expects to incur an after tax charge from
approximately $80 million to $140 million related to these closures. Of these
amounts, between approximately $15 million to $30 million are expected to be
cash costs for severance and facility closure expenses. Depending on the
outcome of the Sand Springs discussions, the company expects to realize
annualized pre-tax cash savings of approximately $35 million to $70 million as
a result of these actions. In accordance with US GAAP requirements, the
company anticipates some of these charges to be included in the three month
period ended June 30, 2009 and some to be included in the three month period
ended September 30, 2009.

    Forward-Looking Statements

    In this press release, "Gerdau Ameristeel" and "company" refer to Gerdau
Ameristeel Corporation and its subsidiaries and 50%-owned joint ventures.
Certain statements in this press release may constitute forward-looking
statements. Such statements can often be identified by the words
"anticipates," "believes," "estimates," "expects," "intends," "plans," and
other words and terms of similar meaning, which are predictions of or indicate
future events, trends or prospects and which do not relate to historical
matters. Forward-looking statements in this press release include statements
about the costs and savings associated with the suspension of production at or
closure of certain of the company's mills. The company cautions readers that
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those currently projected by the
company. In addition to those noted in the statements themselves, any number
of factors could affect actual results, including, without limitation:
    Excess global steel industry capacity and the availability of competitive
substitute materials; the cyclical nature of the steel industry and the
industries served by the company and economic conditions in North America and
worldwide; increases in the cost of steel scrap, energy and other raw
materials; steel imports and trade regulations; a change in China's
steelmaking capacity or slowdown in China's steel consumption; the company's
participation in the consolidation of the steel industry; the substantial
capital investment and similar expenditures required in the company's
business; unexpected equipment failures and plant interruptions or outages;
the company's level of indebtedness; the cost of compliance with environmental
and occupational health and safety laws; the enactment of laws intended to
reduce greenhouse gases and other air emissions; the company's ability to fund
its pension plans; the ability to renegotiate collective bargaining agreements
and avoid labor disruptions; currency exchange rate fluctuations; actions or
potential actions taken by the company's principal stockholder, Gerdau S.A.,
the liquidity of the company's long-term investments, including investments in
auction rate securities, and the company's reliance on its 50%-owned joint
ventures that it does not control.
    Any forward-looking statements in this press release are based on current
information as of the date of this press release and the company does not
undertake any obligation to update any forward-looking statements to reflect
new information, future developments or events, except as required by law.

    About Gerdau Ameristeel

    Gerdau Ameristeel is the second largest mini-mill steel producer in North
America, with annual manufacturing capacity of approximately 12 million tons
of mill finished steel products. Through its vertically integrated network of
19 mini-mills (including one 50% owned joint venture mini-mill), 23 scrap
recycling facilities and 60 downstream operations, Gerdau Ameristeel serves
customers throughout the United States and Canada. The Company's products are
generally sold to steel service centers, steel fabricators, or directly to
original equipment manufacturers ("OEMs") for use in a variety of industries,
including non-residential, infrastructure, commercial, industrial and
residential construction, metal building, manufacturing, automotive, mining,
cellular and electrical transmission and equipment manufacturing. Gerdau
Ameristeel's majority shareholder is the Gerdau Group, a 100+ year old steel
company, the leading company in the production of long steel in the Americas
and one of the major specialty long steel suppliers in the world. Gerdau
Ameristeel's common shares are traded on the New York Stock Exchange and the
Toronto Stock Exchange under the ticker symbol GNA.

    %SEDAR: 00000593E




For further information:

For further information: Investor Relations Contact, Barbara Smith, Vice
President and Chief Financial Officer, Phone: (813) 319-4324, Email:
basmith@gerdauameristeel.com; Media Contact, Philip K. Bell, Director,
External Communications and Public Affairs, Phone: (813) 207-2315, Email:
pbell@gerdauameristeel.com

Organization Profile

GERDAU AMERISTEEL CORPORATION

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