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JFE Holdings and Nucor are planning a joint investment

6 July 2016

The Japanese Corporation JFE Holdings and American company Nucor had a common interest. Its background companies are going to invest in the construction of the new plant. It will be focused on the production of automotive sheet. Location of construction works at Mexico. The cost of the project, which is planned to be implemented by the partners, will be 270 million USD. It is about a sum was discussed in consideration of the agreements. Annual production capacity planned at 400,000 tons. The operation is expected to start in 2019. Shares of the companies will be 50:50.

Both manufacturers expect to receive its benefits. JFE Steel plans to obtain a presence in the area block NAFTA. On this territory there are plants, Japanese leaders-carmakers. The Nucor company is mainly focused on the production of a shaped and rolled. The new project will allow it to expand assortment, to increase the number of products with increased added value.

This investment is beneficial to all. In Mexico the automotive sector is developing very rapidly. Last year local manufacturers produced about 3.6 million cars. This figure also includes the manufacture of light commercial models. It is expected that by 2020 the numbers will grow to the level of 5 million tons. And this is due to the increase in exports to the United States. This will increase the supply of steel products for the sector.

In March of this year a new line for the production of car was launched by Hyundai Steel. In April, about the desire to expand production reported Nippon Steel and Ternium. For Mexican producers, the sheet is rapidly turning into the most popular products. Not surprisingly, given the situation with production. Only about 20 companies on a global scale capable of producing high-quality automotive sheet. This ensures that products of undoubted relevance. Experts estimate global demand for the products is approximately 85−90 million tons/year. The list of leaders include ArcelorMittal, Hyundai Steel, Posco, ThyssenKrupp, Nippon Steel.

Meanwhile, Mexican manufacturers are expanding their own production. National company Ahmsa, has launched a rolling mill. It is focused on the development of heavy steel plate. The main sphere of its application — shipbuilding industry. The annual production capacity reaches 350,000 tons. There is a possibility of its increase to the level of 700,000 tons.

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