It was cheaper to buy than to build plants in the challenged industry. Nucor took advantage of the downturn in the industry to take market share and invest in new facilities. In 2001, Nucor shipped a record tonnage of steel, yet profits were down by 30 percent: it was a bad year for Nucor.
In April, 2005, Business Week gave Nucor the top spot in this yearĂs BusinessWeek 50 (BusinessWeek). It notes how CEO Daniel R. DiMicco spent more than $1.1 billion since 2001 to buy up 10 steel plants, taking advantage of the downturn in the steel industry, and even scooping up Bethlehem Steel Corp. and Trice Steel Co. out of bankruptcy. This enabled Nucor, the only U.S. steelmaker to remain profitable during the downturn, to snap up more than five million tons of annual production capacity for an average of 17 cents on the dollar. NucorĂs profits soared 17-fold from $62.8 million in 2003 to $1.1 billion last year. Analysts give DiMicco credit for positioning his company to benefit from the consolidation of the steel industry. Nucor is now the worldĂs 10th largest steelmaker, and is set to revolutionize steel production with a new process that extrudes steel into thin strips, ready for market, instead of thick slabs that require tedious rolling.
Barnes, F. C., & Tyler, B. B. Nucor in 2001. In C.W.I. Hill and G.R. Jones (eds) Cases in Strategic Management.
˘Nucor: Soaring on wings of steel.÷ BusinessWeek. 5 April, 2005.