Nucor Selects St. James Parish, Louisiana, for Iron Making Facility
CHARLOTTE, N.C., Sept 15, 2010 /PRNewswire via COMTEX/ -- Nucor Corporation (NYSE: NUE) announced today that it has selected St. James Parish, Louisiana, for the construction of a planned $750 million iron making facility, subject to receipt of all requisite environmental permits. The new facility will be owned and operated by Nucor Steel Louisiana, LLC, a wholly-owned indirect subsidiary of Nucor.
Over the past several years, Nucor evaluated multiple sites both in the U.S. and abroad. The St. James Parish site was selected for many reasons, including a very capable work force and the commitment of state and local officials to this project. State and local officials have strongly supported the project, as reflected by both the State's tireless efforts to attract Nucor and the enthusiastic reception by the people of St. James Parish.
"This facility will create good jobs for American workers and, at the same time, it will help Nucor achieve our long-term goal of increasing control over our raw materials supply," said Nucor Chairman and CEO Daniel R. DiMicco.
Governor Bobby Jindal said, "This is a huge win for our state and will ultimately be one of the largest industrial projects in Louisiana history. Nucor's decision to come to Louisiana instead of anywhere else in the nation or the world is not just a tremendous victory for Louisianians, but it also sends a signal far and wide that Louisiana is the best place for businesses to locate, grow and succeed."
The 2,500,000 tons-per-year iron making facility will use direct reduction technology to convert natural gas and iron ore pellets into high quality direct reduced iron ("DRI") used by Nucor's steel mills, along with recycled scrap, in producing numerous high quality steel products such as sheet, plate and special bar quality steel. The DRI facility is the first phase of a multi-phase plan that may include an additional DRI facility, coke plant, blast furnace, pellet plant and steel mill.
The DRI facility was chosen for the first phase of our project, in place of a blast furnace and coke making facility, because it offers a carbon footprint that is one-third of that for the coke oven/blast furnace route for the same volume of product but at less than half the capital cost. While there is some loss/penalty in the "value in use" that will occur from DRI usage at the steel plant versus pig iron usage, the technology improvements that we have introduced and proven at our Trinidad and Tobago DRI plant have significantly reduced that typical penalty. The long-term uncertainty that currently exists on the carbon tax issues in Washington makes this decision a lower risk option at this time.
This project will create a substantial number of quality jobs and it will stimulate the Louisiana economy. The project's first phase will require a $750 million investment and directly create 500 jobs during peak construction. One hundred and fifty permanent Nucor jobs will be created, earning an average annual salary of $75,000, plus benefits; roughly twice the area's median household income. If the additional phases are built, over time Nucor could invest over $3 billion total at the site and increase permanent employment to more than 1,000.
Nucor anticipates issuing prior to year-end approximately $600 million in Gulf Zone Opportunity Bonds to partially fund the capital costs of the project.
Nucor and 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 joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; 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" 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 include, but are not limited to: (1) the sensitivity of the results of our operations to prevailing steel prices and the changes in the supply and cost of raw materials, including scrap steel; (2) market demand for steel products; (3) energy costs and availability; (4) competitive pressure on sales and pricing, including competition from imports and substitute materials; and (5) capital investments and their impact on our performance. These and other factors are outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2009 Annual Report on Form 10-K. 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.
SOURCE Nucor Corporation