Page 200 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 3 Marketing

CASE STUDY Gerdau joint venture

RIO DE JANEIRO – Gerdau SA, Latin specialty steel and construction rebars
America’s biggest steelmaker, wants to for the local market, in a joint venture
expand in India, where it may also consider with Kalyani Steels Ltd., at a plant near

a move into iron ore. Bangalore.
Gerdau will start up its fi rst Asian venture The Gerdau group may also look to mine iron
in India later this year (2012), producing ore in India, where there are large reserves of
some 300,000 metric tons a year of rolled this main steelmaking ingredient.

Source: Adapted from www.4-traders.com/GERDAU-SA-6492877/news/Brazil-s-Gerdau-CEO-Says-India-Is-
Beachhead-For-Asian-Expansion-14398475/

TASK
a What is meant by ‘joint venture’?
b Using the information in the case study, identify and explain the benefits to Gerdau and Kalyani Steels Ltd. of entering
into a joint venture.
c Do you think there are any disadvantages to either company of entering into a joint venture?

198 TEST YOURSELF
1 Identify and explain two reasons why a business might want to expand into other
countries.
2 Identify and explain two problems a business might face when expanding into
other countries.