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Speech Outline. Nucor Overview Steel Industry Outlook 2009-2013 U.S. Economy Outlook. Nucor Overview. Nucor’s History.

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Presentation Transcript
speech outline
Speech Outline
  • Nucor Overview
  • Steel Industry Outlook 2009-2013
  • U.S. Economy Outlook
nucor s history
Nucor’s History

Ransom E. Olds, creator of the Oldsmobile, had a dispute with stockholders and left his own company – Olds Motor Works. He soon formed Reo Motor Company, which evolved into the Nuclear Corporation of America and ultimately Nucor.

Nuclear Corporation acquires Vulcraft, an unassuming producer of steel joists and girders. To run the newly acquired Vulcraft, Nuclear Corporation hires Ken Iverson as CEO.

Nucor’s first mini mill to produce merchant steel products, located in Darlington, SC, goes into production

Nucor ushers in a new era of steelmaking as thin-slab technology goes on-line at the new mini mill in Crawfordsville, Indiana. It is the first mini mill in the world to make quality flat rolled steel using the technology. Nucor also established a joint venture beam facility with Yamato Kogyo of Japan, utilizing near net shape casting.

nucor s history continued
Nucor’s History (continued)

Dan DiMicco is named the new president and CEO of Nucor. DiMicco has led the company through an unparalleled period of growth. The company moved from green field growth to acquisition based growth.

Another world first: Nucor’s Castrip micro mill goes on-line in Crawfordsville, Indiana. This revolutionary technology instantly transforms molten steel directly into steel sheets in just one remarkable step. Compared to an integrated steelmaking facility, the Castrip process consumes about 95% less energy and emits less than one-tenth the greenhouse gases.

nucor today
Nucor Today
  • 59 Operating Facilities in 18 states, Italy and Trinidad
  • Nucor operates scrap-based steel mills in 19 facilities – producing bars, beams, sheet, and plate.
  • In 2008, 21,682 employees generated $23.7 billion in sales and 20.9 million tons of steel shipments
  • Corporate Staff of 85 Employees
  • Harris Steel Group acquired in March 2007. Operated as a separate, wholly-owned subsidiary – 46 rebar fabrication facilities between Canada & United States; 2 cold finished bar, wire & mesh facilities; 11 metal grating facilities; steel trading and distribution
  • DJJ acquired in February 2008. Operates as a separate, wholly-owned subsidiary – 61 scrap processing facilities; Brokerage and service group, N.A. scrap processing yards; self-service used auto parts stores
  • Largest recycler in the North America
  • Largest producer of steel in North America

Nucor Locations

  • Nucor Facilities
  • Bar Mill Group (12)
  • Structural Mills (2)
  • Sheet Mill Group (4)
  • Plate Mills (2)
  • Vulcraft / Verco joist & deck (16)
  • Cold Finish Group (5)
  • O Building Systems Group (10)
  • Fastener Division (1)
  • Nucon (2)
  • Harris Steel Group Facilities
  • Reinforcing Steel Fabrication Plants
  • - 23 Canadian Facilities
  • - 12 U.S. Facilities
  • Cold Finished Bar, Wire, Mesh (“IPG”)
    • - 2 Canadian Facilities
  • Steel & Aluminum Grating, Expanded Metal (“IPG”)
    • - 5 Canadian Facilities
    • - 6 U.S. Facilities
  • Int’l Offices:
  • Novosteel (Trading Co.)
  • Monterrey, MX
  • Neuchatel, SWZ




Nu-Iron DRI Facility

North America’s most DIVERSIFIED steel producer

us raw steel production vs capacity
US raw steel production vs. capacity

Source: AISI, First River

us gdp vs steel demand 1988 to 2008
US GDP vs. Steel Demand1988 to 2008

Steel demand rises

when GDP grows >2.5%

Global Insight’s US Real GDP Percent Change Estimates

2009 – (2.5%)

2010 – 2.0%

2011 – 2.9%

Steel demand falls

when GDP grows <2.5%

Source: US BEA, AISI, First River

na auto production forecast
NA auto production forecast

Logic Check:

NA scraps 14 million per year

Imports average 2.5 million

NA must build 11.5 just to stay even

35%+ drop this year

Average 11.5 2009 to 2013

NOTE:***Ward’s North America Vehicle Production was: 8.2M Vehicles in 2009 and 9.99M Vehicles in 2010

Source: CSM Worldwide (May 2009)

non residential construction forecast no return to 1990 levels thru 2013
Non-residential construction forecastNo return to 1990 levels thru 2013

Top forecast line is FW Dodge

Bottom line is Portland Cement Association

30%+ drop 2008 to 2010

Average 1,115 2009 to 2013

Source: First River, FW Dodge and PCA (Spring 2009)

us finished steel demand forecast weak throughout forecast period
US finished steel demand forecastWeak throughout forecast period



Actual ADC

35-40% drop this year

Average 90-95 MT 2009-2013

Source: CSM, FW Dodge, PCA, WSA, First River


Economic Recovery

  • Confidence
  • Credit
  • Government Action
consumer economy in transition
Consumer Economy in Transition

Consumers transitioning from debt-driven economy to savings-driven economy.Consumers using less debt

End-use demand determined by what consumers can afford, NOT by what they can borrow.

consumer credit 1997 2009
Consumer Credit1997-2009

Annual % Increase

in Consumer Credit


Consumer Credit

During 2001 recession,

credit still grew at rates

of 5-10% per year

Lehman Brothers

2009 - New credit

approaching ZERO

Source: U.S. Federal Reserve, Consumer Credit Outstanding, Millions of Dollars, Seasonally Adjusted

government driving economy
Government Driving Economy

US trade deficit at all time high

US debt at all time high

US budget deficit at all time high

Government is picking up the debt that consumers are shedding.

government action needed in 2009
Government Action Needed in 2009

Consider American Manufacturing when enacting new public policy, such as:

Employee Free Choice Act

Cap-and-Trade and Climate Change

National Health Care

Energy Policy

Government can drive costs and unemployment up by over regulation or make American manufacturing more competitive and create jobs.

government action needed in 200922
Government Action Needed in 2009

Enforcement of the Rules of International Trade

End currency manipulation

Challenge illegal export subsidies

Fight foreign governments competing in commercial markets