Nucor plans to spend $2bn for capacity expansion projects in 2020. The investments include two rebar mills worth $425mn; one in Florida with an approximate annual capacity of 350,000mt and the other in Kankakee, Chicago with 500,000mt capacity. These mills are strategically located to reduce Nucor’s raw material cost providing the company logistical cost advantage.
The second investment is into higher value items which can be sold at premium rates. Nucor has partnered with JFE Steel Corporation of Japan and will spent $180mn for a joint venture in Mexico that will serve the local auto industry. The plant’s annual capacity will be approximately 400,000mt. These projects are expected to be launched by the end of 2020.
In 2021, the company plans to expand its Gallatin plant which produces wider and thicker steel gauges. Nucor plans to add a galvanizing line to its existing Arkansas facility which will provide premium products in that area. The overall capital expenditure for the above projects is roughly around $925mn.
The biggest project in Nucor’s capacity expansion plan is to build a new steel plates mill in Kentucky with an investment of $1.35bn. The project is expected to be completed in late 2022. The Brandenburg, Kentucky plant will be located in a low-cost transportation area with high steel demand.