Integrating Informal Scrap Collectors in the Value Chain in Latin America

The joint objective of Gerdau, one of the largest steel companies in the Americas, and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is to strengthen the organisation and management of informal sector actors, mostly men, women and children who collect scrap, in the steel value chain in selected Latin American countries and systematically integrate them into the iron and steel business in a profitable and fair way. A total of €3 million was foreseen for implementation of the project between September 2010 and August 2013 (€2 million private support and €1 million public support). The project is working in four countries: Brazil, Chile, Uruguay and Peru.

Integrating Informal Scrap Collectors in the Value Chain in Latin America

Many men, women and children in South America earn their income in precarious conditions as scrap collectors. Gerdau, a multinational steel company headquartered in Brazil, gets much of its scrap metal through informal collectors. To improve their working conditions and to improve the quality of the material delivered, Gerdau and GIZ are working with these small suppliers to integrate them into the supply chain - an investment that pays off for both sides.

3,000 scrap collectors in Brazil, Chile, Peru and Uruguay have been trained by Gerdau and GIZ in basic entrepreneurial skills. They learn how to issue invoices, recognize good quality scrap metal, and to separate and sort scrap. Together with NGOs in the respective countries, courses and peda-gogical materials are being developed to improve the technical training of workers and also to motivate civil society to improve the skills, productivityand competitiveness of the workers. This material will be available to future initiatives. Most scrap collectors had previously worked in precarious conditions, risking their health and hence are also provided training in health related issues. These efforts have resulted in making reliable business partners who receive a fair price for their supplies to Gerdau. Under the partnership, Gerdau also developed a monitoring system for activities across the entire value chain.


  • Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

    Funding Agencies
    Germany | Staff size: Unknown
  • Gerdau

    Goods Supplier
    Brazil | Staff size: 10,000+

    The Bureau Of Public Enterprises (BPE) is the Secretariat of the National Council on Privatisation (NCP) and is charged with the overall responsibility of implementing the policies and decisions...

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Key Information

LocationLatin America and Caribbean, Uruguay, Chile, Peru, Brazil
  • Start Date 2010
  • End Date 2013
  • Sectors