The influence of the successful experience of American newcomer steel on China's steel industry
Issuing time:2022-05-16 19:01
With the rise of the second industrial revolution, the American steel industry reached its peak. From 1886 to 1973, it almost always ranked first in the global crude steel output (it was briefly overtaken by the former Soviet Union in 1971 and 1972). Since then, due to the impact of multiple factors such as the oil crisis, the continuous rise of steel industries such as Japan and China, and the structural transformation of traditional manufacturing industry in the United States, the U.S. steel industry fell into a downturn. Its domestic long-process large-scale combined steel enterprises were repeatedly hit hard in several economic cycle fluctuations, and the once famous Bethlehem Steel Company, AK steel and other enterprises finally went bankrupt or were acquired. Although Nucor, which only set foot in the field of steelmaking in 1966, missed the golden development period of the U.S. steel industry, it led the development of short process steel mills with its unique business strategy. It gradually grew from a small steel mill to an American steel giant. After many financial crises, it has been listed since 1972 and has maintained a profit for 48 years except for the loss in 2009. Analyzing the successful experience of nuke steel and studying its operation and expansion strategy has important reference significance for the development of China's iron and steel enterprises.
Main development history of Newco steel
The history of nuke steel can be traced back to 1905. Its predecessor is REO automobile company established by oz. In 1955, REO automobile company and nuclear consulting company established Nuclear Corporation. In 1962, American nuclear group acquired vulcraft company, which mainly produces steel beams. In order to ensure the economic and reliable supply of raw materials, in 1966, American nuclear group began to set foot in the steelmaking business. In 1971, the US nuclear group officially changed its name to Nucor and determined the development direction with steel as the core business. Its development process can be roughly divided into the following three stages (Table 1):
The first stage (1969-2000): mini mill period. Since the first mini mill plant was put into operation in 1969, in addition to supplying its own steel beam plant, nuke steel has successively opened three mini mill plants to meet the needs of external customers. With the expansion of steel-making scale, nuke has not only gained a firm foothold in the field of steel, but also expanded its business to downstream fields such as cold processing (precision parts), fasteners, architectural system design and manufacturing by building new factories. In addition, Nucor steel built the world's first thin slab continuous casting and rolling (CSP) production line in 1989. The production line not only has high efficiency and low cost, but also helps it realize the leap from single long product to long product + plate product.
The second stage (2001-2016): the whole industry chain M & A expansion period. Around 2000, in the face of a new round of steel capacity expansion, due to the low growth rate of demand, the overall situation of the U.S. steel industry deteriorated and a large number of steel enterprises went bankrupt. With its cost advantage, nuke steel has carried out more than 20 acquisition activities against the cycle.
In terms of iron and steel products, through horizontal mergers and acquisitions of relevant enterprises, the products eventually cover the main varieties of thin plate, bar, section steel, medium and thick plate, pipe and so on.
In terms of upstream raw materials and energy, Newco steel completed the acquisition of DJJ company, the oldest and most comprehensive metal waste recycling company in the United States, becoming the largest scrap recycling company in North America. In addition, Nucor steel has successively invested in the construction of direct reduction iron plants in Central America and the United States, and signed a long-term agreement (20 years) with EnCana oil & gas (USA) to ensure the stable supply of natural gas and further strengthen the guarantee of upstream raw materials and energy.
In terms of downstream industry extension, nuke steel has become the largest reinforcement processing and manufacturing service provider in North America through the acquisition of Harris Steel Group; Acquire skyline company to develop steel sheet pile business; Acquire ITC company and enter the field of pipe service, etc.
As a result, nuke steel has preliminarily completed the overall layout of the industrial chain, forming a "tripartite" business trend of steel production, steel processing, raw materials and energy.
The third stage (from 2017 to now): expansion and upgrading stage. At this stage, in terms of the original business layout, nuke iron and steel responded to the expected demand and industry challenges and maintained its competitiveness through factory expansion, transformation and upgrading. For example, through the transformation and upgrading of Gallatin steel plant, the specification and grade range of high value-added products such as advanced high-strength steel and API steel have been further expanded while increasing production capacity. The first low-carbon steel-making plant in Missouri will be built in 2019, which is the first low-carbon power plant in the United States. In recent years, affected by the epidemic and other factors, there has been a "steel shortage" in the United States. Nuke steel has frequently invested in expanding production capacity in Kentucky, Illinois, West Virginia and other regions.
Summary of successful experience of nuke steel
Throughout the development process and main business layout characteristics of nuke iron and steel, its successful experience can be summarized in the following three aspects.
（1） Ability to grasp strategic opportunities. Newco steel focuses on being familiar with the technology and market in the field, and is good at discovering and seizing opportunities. In terms of technology, nuke steel dared to boldly try new technologies. For example, it built the world's first CSP production line, which was a model of integrated innovation at that time, marking the vigorous development of electric arc furnace steelmaking in the United States. In addition, Nucor participated in the establishment of castrip company, built the world's first commercial castrip production line, commercialized it and realized the overall output of technology. In terms of industrial chain layout, in the face of rising scrap prices, nuke steel seized the opportunity of the "shale gas" revolution in the United States, re arranged direct reduction iron production plants in the United States, and ensured stable low-cost natural gas supply through the long-term association. The president of Newco has said that if the crisis continues to worsen, we may see more opportunities for joint ventures and mergers and acquisitions.
（2） Ability to control costs. Providing high-quality products at the most favorable price is the core principle of Newco Steel's operation and reflects all aspects. For example, in the early stage of plant construction, taking advantage of the low-level operation of scrap steel, select short process process equipment with miniaturization and low capital cost to reduce production and operation costs; Then innovative use of CSP, castrip and other technologies to further reduce costs and expand product types. In addition, by optimizing the industrial layout of scrap steel, direct reduction iron and other industries, and adjusting the raw material combination according to the supply price changes of different raw materials, the profit can be maximized. The cost leadership strategy has made nuke steel a model of low-cost steelmaking in the world. It has not only successfully resisted the cyclical fluctuations of the industry, but also created conditions for counter cyclical acquisition.
（3） Build the ability of differentiated competition. Newco's profitability proves the success of its operation model, but the characteristics of low cost and low threshold make it easy for competitors to imitate. The most typical case is steel power company founded by Newco's former executive officer. In order to get rid of homogeneous competition, nuke steel continues to extend to the field of high value-added products and services. More importantly, nuke has built a management system and corporate culture that are difficult to replicate by other companies. For example, the extremely streamlined management organization makes it have a decision-making speed unmatched by its competitors; The people-oriented corporate culture has fully mobilized the enthusiasm and initiative of employees and made employees more innovative. Therefore, in the face of fierce competition, Nucor can still grow steadily.
Enlightenment of nuke steel to the development of China's iron and steel enterprises
（1） Build a multi-party collaborative technological innovation model. First, strengthen benchmarking analysis, understand the technical advantages and weaknesses of the enterprise, and plan the development direction scientifically and reasonably. Second, fully collect the market information of cutting-edge technologies through independent exploration by enterprises or consulting by think tanks, accurately judge the technology development trend, and improve the ability to find and grasp opportunities. Third, strengthen coordination with domestic and foreign large-scale metallurgical equipment manufacturing service providers, jointly explore new technologies and processes, and effectively promote industrialization practice.
（2） Strengthen the capacity of industrial chain construction. Facing the new situation, China's iron and steel enterprises should base on their own business, scientifically extend the industrial chain and build a new pattern of development. For example, by distributing upstream raw material resources and energy such as iron ore, scrap steel and green energy, we can reduce production costs and ensure the safety and stability of the supply chain; Expand products to downstream areas such as deep processing, logistics distribution and service-oriented manufacturing, and improve the proportion of high value-added products and service capacity to downstream industries; At the same time, actively carry out the construction of horizontal industrial chains such as green and low-carbon, circular economy and commerce to enhance the overall competitiveness of enterprises.
（3） Build a high-quality and efficient operation and management system. The competition of steel products is the comprehensive competition of quality and price. Quality is the core of cutting into the high-end market, and cost is the key to survival and development. On the one hand, China's iron and steel enterprises should take improving quality and efficiency as the core, integrate intelligent and other means, improve the production and management system, optimize the process structure, and open up the channel of high-quality development with high-quality products at high prices and good services. On the other hand, learn from the experience of corporate culture construction of Nucor company, combined with the actual situation of the development of iron and steel enterprises, mobilize the work enthusiasm of employees, cultivate the ownership spirit of employees, and promote the development and progress of the enterprise.