by: alonzo crawley, brett dunn, cindy huynh, kevin nguyen, nguyet nguyen & jason swoap
TRANSCRIPT
By: Alonzo Crawley, Brett Dunn, Cindy Huynh, Kevin Nguyen,
Nguyet Nguyen & Jason Swoap
Mission
STEEL: We Make It, We Move It
Introduction
Jason’s Slide
Internal Analysis
Management 5 layers of management:
President and CEO Vice President General Manager Department Manager Supervisory/Professional
Divisions operate independently
Internal Analysis
Compensation Incentive Bonus Strategy Categories:
Production Department Manager Non-Production and Non-Department Manager Senior Officer
Executive Salary No Perks
Additional Benefits Profit Sharing
Competitors Analysis
Nucor has many competitors some are: ArcelorMittal Corus Nippon Shanghai Baosteel US Steel Corp Riva
External AnalysisGeneral Environment
Demographic Retiring baby-boomer generation Increase in women workers vs. decrease in men
Economic Recent global recession
* Decrease in steel demand
External AnalysisGeneral Environment cont.
Political/Legal Taxation and Regulations Stimulus Package
Socio-cultural Plant safety procedures
Technological Use of electric arc furnace
External AnalysisIndustry Environment
External AnalysisIndustry Environment
Five Forces Model
Threat of New Entrants Barriers to entry
Bargaining Power of Suppliers Scrap steel supplies
External AnalysisIndustry Environment cont.
Bargaining Power of Buyers Buyers as neighbors
Threat of Substitute Products Wood and carbon fiber
Intensity of Rivalry Among Competitors New territories
Business Segments
Steel Mills The external customers are primarily
manufacturers, steel service centers and fabricators
Steel Products Used extensively as part of the roof and floor
support systems in manufacturing, commercial, and institutional buildings
Raw Materials A Nucor facility located in Trinidad that produces
direct reduced iron used by Nucor’s steel mills
SWOT Analysis
Most diversified steel producers in the world
Maintain a low-cost leadership position
Exploiting new technologies to improve production speed, quality, and cost
Strong employee relationship and management philosophy
SWOT Analysis
Prone to economic declines Sensitive to volatility of steel
prices Change in cost of raw
materials Integrate their acquisition
strategy Effectively cater to the
international markets as well as its competitors
SWOT Analysis
Capitalize on international market penetration
Optimization of existing operations through continuous innovation
Acquisitions of new strategic partners and potential for growth
Pursue contracts to secure natural gas supplies
SWOT Analysis
Current global recession and credit crisis
Environmental compliance and regulation
Overcapacity in the global steel industry
Increased costs of electricity and natural gas
Acquisition Plan
Aggressive acquisition strategy since 2006 : 6 companies acquired between 2006-2008 Acquired SHV North America Corporation in
February 2008 for $1.44B Focused on securing raw materials Scrap steel = used by current steel mills Iron ore = used by Trinidad & Louisiana
facilities
Acquisition Plan
What we are going to acquire : Trailer Bridge, Inc. Marine transportation and trucking company Currently ships from Jacksonville, FL to Puerto
Rico & Dominican Republic Total assets=$123M & Total liabilities=$125M $32.7M purchase price
Acquisition Plan
Why we are going to acquire it: Supply our Trinidad and Louisiana facilities
with iron ore from Brazil All 8 U.S. iron ore mines currently owned by
competitors or already have L-T contracts for their annual capacity
An opportunity to penetrate the Brazilian steel market with our products
Acquisition Plan
How we are going to acquire it: Cash is king $2.4B in cash and cash equivalents mainly due
to issuance of additional common stock Not expecting to see a material amount of
revenue generated by new shipping division but acquisition is aligned with future strategic goals
Financing Plan
Financing Plan
Financing Plan
