Nucor Set to Break Ground on Mexican Galvanizing Plant
04/21/2017 - Despite the uncertainty surrounding the United States’ trading relationship with Mexico and the future of the North American Free Trade Agreement, Nucor said it remains committed to building a US$270 million joint venture galvanizing plant there.
Speaking during a quarterly earnings conference call with analysts on Thursday, Nucor chief executive John Ferriola said Nucor and partner JFE Steel Corp., in fact, are planning a ground-breaking for either later this month or early next month.
“We plan to go ahead with the investment,” Ferriola said. “We're comfortable with (our investment) there. The automotive market … is certainly growing in Mexico, and our new plant is going right in the middle of the growth. So we feel very good about the project.”
Nucor announced the joint venture project with JFE Steel in June 2016. Located in central Mexico, the plant is being designed to coat 400,000 tons of sheet per year, with each company supplying equal amounts of substrate.
Ferriola said Nucor has found a good partner in JFE.
“We find them to be very similar to Nucor in their aggressiveness in their time lines.”
Also during the call, Ferriola discussed some of the problems at Nucor’s direct-reduction plant in Louisiana, which took an unplanned outage in early February due to equipment failure. Not long after the plant came back up, it was knocked off-line a second time after a conveyor belt line broke.
Ferriola said such issues are to be expected when starting up a new facility, especially one as complicated as the Louisiana plant.
“We had similar issues when we first started our (DRI) plant in Trinidad,” Ferriola said, adding that it's now producing at record rates.
Ferriola also said Nucor is confident in the plant’s underlying technology as the problems have been with the ancillary equipment, particularly a process gas heater.
“We've done a redesign of the top half of that, which failed a couple of years ago. We're working on a redesign on the bottom half, which gave us some problems a couple of weeks ago.
“We’ve had our challenges. We're working our way through them,” Ferriola said.
“We plan to go ahead with the investment,” Ferriola said. “We're comfortable with (our investment) there. The automotive market … is certainly growing in Mexico, and our new plant is going right in the middle of the growth. So we feel very good about the project.”
Nucor announced the joint venture project with JFE Steel in June 2016. Located in central Mexico, the plant is being designed to coat 400,000 tons of sheet per year, with each company supplying equal amounts of substrate.
Ferriola said Nucor has found a good partner in JFE.
“We find them to be very similar to Nucor in their aggressiveness in their time lines.”
Also during the call, Ferriola discussed some of the problems at Nucor’s direct-reduction plant in Louisiana, which took an unplanned outage in early February due to equipment failure. Not long after the plant came back up, it was knocked off-line a second time after a conveyor belt line broke.
Ferriola said such issues are to be expected when starting up a new facility, especially one as complicated as the Louisiana plant.
“We had similar issues when we first started our (DRI) plant in Trinidad,” Ferriola said, adding that it's now producing at record rates.
Ferriola also said Nucor is confident in the plant’s underlying technology as the problems have been with the ancillary equipment, particularly a process gas heater.
“We've done a redesign of the top half of that, which failed a couple of years ago. We're working on a redesign on the bottom half, which gave us some problems a couple of weeks ago.
“We’ve had our challenges. We're working our way through them,” Ferriola said.
