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 Analysis General Environment Demographic Retiring baby-boomer generation Increase in women workers vs. decrease in men Economic Recent global recession * Decrease in steel demand
External Analysis General Environment cont. Political/Legal Taxation and Regulations Stimulus Package Socio-cultural Plant safety procedures Technological Use of electric arc furnace
External Analysis Industry Environment
Five Forces Model Threat of New Entrants Barriers to entry Bargaining Power of Suppliers Scrap steel supplies
External Analysis Industry 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 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