Nucor, JFE Steel form joint venture

Nucor Corp.,  headquartered in Charlotte, North Carolina, and Japan-based JFE Steel Corp. have announced the formation of a 50-50 joint venture to build and operate a continuous galvanizing steel line in central Mexico. The goal of the venture is to supply high-quality auto steel sheet to the Mexican automotive market.

The joint venture, to be called Nucor-JFE Steel Mexico, is expected to cost $270 million and to have an annual 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,” says 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.”

The decision to build a steel plant in Mexico is supported by reports that forecast automotive production in Mexico to increase from 3.4 million vehicles to 5.3 million by 2020.

According to Nucor, the joint venture positions it with improved geographic reach and expanded product offering to address the roughly 50 percent 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 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 Corp. is an integrated steel producer with several steel mills in Japan.

Nucor and its affiliates manufacture a host of steel products. The company operates facilities primarily in the United States and Canada.