Ferriola Confident Big River Won't Drain Nucor's Business
10/21/2016 - Nucor Corp. is prepared to battle start-up Big River Steel, and, in fact, believes it has the upper hand on its new competitor, Nucor chief executive John Ferriola said Thursday.
“We’re confident that we can take it on without having an impact upon our business,” Ferriola said during a conference call to discuss Nucor’s third-quarter earnings.
During the call, Ferriola told analysts that Big River’s entry into the market will undoubtedly be disruptive. However, he said Nucor's efforts to move up the product value chain will help insulate it from those disruptions, especially as it will take Big River some time before it can penetrate product areas Nucor is now in.
Big River is on the verge of opening its US$1.3 billion “flex mill” and expects to be ready to deliver hot-rolled band in December. Located in Arkansas, the mill, which combines the flexibility of a mini-mill and the product capabilities of an integrated facility, is in Nucor’s backyard.
Nevertheless, Ferriola said Nucor has an another advantage -- the US$230 million specialty cold mill it is planning to build at its Arkansas sheet plant.
Nucor executives announced plans for the cold mill in September, saying that it would give the company the ability to produce products that it can’t currently make. Ferriola elaborated on those new capabilities on Thursday, revealing that the mill will be able to produce approximately 500,000 tons annually.
He said the mill will allow Nucor to reduce cold steel to lighter gauges and much higher strengths. And, he said, upgrades to the plant’s batch anneal shop will allow it to produce motor lamination steels with electrical properties previously only obtainable in non-oriented silicon steels.
In addition, the cold mill will broaden the automotive capabilities of Nucor’s galvanizing lines at its Alabama and South Carolina sheet mills, he said.
Also during the call, Ferriola spoke about Nucor’s newly acquired Texas plate mill and told analysts that it is booking more orders that had been expected.
During the call, Ferriola told analysts that Big River’s entry into the market will undoubtedly be disruptive. However, he said Nucor's efforts to move up the product value chain will help insulate it from those disruptions, especially as it will take Big River some time before it can penetrate product areas Nucor is now in.
Big River is on the verge of opening its US$1.3 billion “flex mill” and expects to be ready to deliver hot-rolled band in December. Located in Arkansas, the mill, which combines the flexibility of a mini-mill and the product capabilities of an integrated facility, is in Nucor’s backyard.
Nevertheless, Ferriola said Nucor has an another advantage -- the US$230 million specialty cold mill it is planning to build at its Arkansas sheet plant.
Nucor executives announced plans for the cold mill in September, saying that it would give the company the ability to produce products that it can’t currently make. Ferriola elaborated on those new capabilities on Thursday, revealing that the mill will be able to produce approximately 500,000 tons annually.
He said the mill will allow Nucor to reduce cold steel to lighter gauges and much higher strengths. And, he said, upgrades to the plant’s batch anneal shop will allow it to produce motor lamination steels with electrical properties previously only obtainable in non-oriented silicon steels.
In addition, the cold mill will broaden the automotive capabilities of Nucor’s galvanizing lines at its Alabama and South Carolina sheet mills, he said.
Also during the call, Ferriola spoke about Nucor’s newly acquired Texas plate mill and told analysts that it is booking more orders that had been expected.
“The mill has already doubled its production rate since completion of the acquisition. We are very excited about the opportunities for profitable, long-term growth Nucor Steel Longview offers our plate business.”
