Nucor Analysis

1 Devdatta Bhattacharya, Section B Nucor at a crossroads Arena: ? ? ? ? Nucor has been actually successful with its existing steel minimills, achieving concordant profits and maintaining worker productivity The steel industry is woeful from significant oer potentiality; darn total US contentedness alone stands at somewhat 133 gazillion dismiss tons of production per year, the mart consumed tho 70 million tons of steel in 1986, leaving over 60 million tons of idled capacity The low-end structural products grocery is sodding(a) with numerous small minimills competing against each other in a stagnant or shrinking market Nucors only choice for continued growth is to invest in revolutionary technology, an unproved shrink-slab cast plant that would allow it to enter the market for straight off main sheet of paper steel with a low tokenish economic scale and marginal cost of production damage choose: ? Exhibits 12A and 12B of the case present in markation on cos ts and advantageousness for the production of hot and cold rolled sheet as produced by the proposed rationalize-slab minimill and by the integrated mills, the only current producers of flat-rolls.

skirt 1: Construction greets for Flat-Rolled Product Plants Type of sheet Hot-rolled Cold-rolled Thin-slab Minimill $236 $450 Modernized Integrated: $451 $675 % Savings with Minimill: 48% 33% hedge 2: Comparative Operating Data for Flat-Rolled Product Plants Thin-slab Minimill Cost per ton Revenue per ton Profit contribution per ton HR $225.00 $306.50 $81.50 CR $283.00 $390.50 $107.50 Modernized Integrated HR $261.50 $326.00 $64.50 CR $349 00 $454.50 $105.50 lJnmodernized Integrated H R $300.00 $325.00 $25.00 CR $403.00 $453.00 ! $50.00 ? ? So, the costs of introducing new capacity in the reach of thin-slab minimills is significantly lower than in form of an integrated mill with savings of 48% or 33%, depending on the type of sheet (hot-rolled or cold-rolled) Advantage of thin slab mills: The cost per ton of producing hot-rolled sheet in a thin-slab minimill is $225, a...If you want to get a full essay, order it on our website: OrderEssay.net

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