Steel manufacturer Nucor Corp. is laying the groundwork for future growth with plans to plow $370 million into one of its California facilities and set up two factories for a newly formed division.
Charlotte-based Nucor said last week it will, pending regulatory approval, build a continuous galvanizing line at its Fontana, California, mill. The $370 million addition will serve construction customers in the western part of the country and should be complete 30 months after construction starts.
Leon Topalian, chairman, president and CEO of Nucor, said the investment in the California Steel Industries Inc. plant east of Los Angeles will help meet a market need created by closures of other galvanizing facilities. Nucor’s plans call for 400,000 tons of annual capacity, which would add 50% to CSI’s capabilities.
Nucor earlier this year paid $400 million to acquire 51% of CSI, which employs about 800 people, as part of an acquisition blitz that also included the $3 billion purchase of C.H.I. Overhead Doors and the smaller deal for Summit Utility Structures LLC, which specializes in metal poles and other infrastructure gear. In announcing the latter transaction, however, Topalian and his team said they planned to take Summit’s Northeast footprint national in an attempt to capitalize on the momentum being added to utility markets by the Inflation Reduction Act.
That work is progressing, the company said earlier this month: The newly established Towers & Structures Division, executives said, is weighing locations in the Midwest and Southeast for two tower production plants. The company didn’t disclose estimates for how much those plants might cost to build or how many people they could employ and a spokesperson couldn’t be reached for comment. But in a statement, the Nucor team said the factories will use straight-line production and “will be extensively automated and will include advanced hot-dip galvanizing operations.”
Nucor finished the first nine months of 2022 with net earnings of more than $6.3 billion on sales of nearly $33 billion. Those numbers were up from $4.6 billion an $26.1 billion, respectively, from last year. Its shares (Ticker: NUE) have risen about 25% over the past six months, growing the company’s market capitalization to about $35 billion.