CHARLOTTE, N.C., June 9, 2016 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today that it is forming a 50-50 joint venture with JFE Steel Corporation of Japan to build and operate a plant in central Mexico to supply that country's automotive market. The plant is expected to have a cost of $270 million and a capacity of 400,000 tons per year of galvanized sheet steel.
"JFE Steel is a natural partner for us. They are a premier supplier of high-quality products to the automotive industry and share our focus on long-term growth," said John Ferriola, Chairman, CEO and President of Nucor. "This joint venture builds on our efforts to increase our production of differentiated and value-added products. Continued growth in Mexico's automotive production presents an opportunity for Nucor to increase our sales to this important market."
Automotive production in Mexico is projected to increase from 3.4 million vehicles to 5.3 million by 2020. The joint venture positions Nucor with improved geographic reach and expanded product offering to address this roughly 50% growth in automotive demand and builds on JFE's commitment to serve the NAFTA market. Nucor and JFE will each supply an equal amount of substrate to be further processed at the new facility.
The companies are currently working to secure required conditions to move to completion, including but not limited to regulatory approvals. Operations are expected to begin in the second half of 2019.
JFE Steel Corporation is one of the world's leading integrated steel producers. The company operates several steel mills in Japan, as well as technical research centers dedicated to the development and application of the most advanced steelmaking technologies in the world. JFE has established business partnerships with many leading companies in order to expand its presence in markets around the world.
Nucor and its affiliates are manufacturers of steel products, with operating facilities primarily in the U.S. and Canada. Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating; and wire and wire mesh. Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap. Nucor is North America's largest recycler.
Certain statements contained in this news release are "forward-looking statements" that involve risks and uncertainties. The words "believe," "expect," "project," "will," "should," "could" and similar expressions are intended to identify those forward-looking statements. Factors that might cause the Company's actual results to differ materially from those anticipated in forward-looking statements are discussed in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's fiscal 2015 Annual Report on Form 10-K, Item 1A. Risk Factors. The forward-looking statements contained in this news release speak only as of this date, and Nucor does not assume any obligation to update them.
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SOURCE Nucor Corporation