US-based steel producer Nucor Corporation has announced that it will set up a 50/50 joint venture with Japanese steelmaker JFE Steel Corporation to build and operate a plant in central Mexico to supply the local automotive market. The total investment for the joint venture is expected to be $270 million. The new plant will have an annual capacity of 400,000 mt of galvanized sheet and is expected to start operations in the second half of 2019.
According to Nucor Corporation, automotive production in Mexico is projected to increase from 3.4 million vehicles to 5.3 million by 2020. The joint venture will position Nucor with an improved geographic reach and expanded product offering to address the roughly 50 percent growth in automotive demand and will build on JFE's commitment to serve the NAFTA market (Canada, US, and Mexico). Nucor and JFE will each supply an equal amount of substrate to be further processed at the new facility.