This Week's Herman Trend Alert

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  The Herman Trend Alert

April 13, 2005

The Promise of Advanced Manufacturing

We have long touted the prospect of advanced manufacturing being important in the United States and around the world. There is a quiet revolution going on in the steel industry, A leading-edge process for making steel holds the promise of eliminating shortages and providing steel where and when we need it.

This quiet revolution was started more than a century ago in 1857 when British inventor Henry Bessemer first patented a process for the twin-roll casting of metals. Unfortunately, although Bessemer's process worked, it was never commercially viable. In 2000, a joint venture of Nucor and partners BlueScope Steel Ltd. of Australia and Ishikawajima-Harima Heavy Industries (IHI) of Japan was formed, named Castrip LLC. Nucor is Castrip's first licensee. Construction was begun on the world's first Castrip® plant in 2001. Operations began in May of 2002.

In early February 2005, Daniel DiMicco, Nucor's president and CEO announced that "most of the technical cost issues" had been resolved and "energy cost issues addressed". Recently, the company has been able to cast steel with the new plant to a thickness as low as 0.84mm, while simultaneously reducing carbon dioxide and greenhouse gas emissions and energy costs by 85% "from ladle to finished coil".

Successfully commercializing Bessemer's process involves using an advanced method and the care of PhD. metallurgists versed in a discipline called "Solidification Phenomena". The Castrip method requires far fewer employees than traditional steel mills and a fraction of the floor space. Not surprisingly, Nucor is now planning to build a second plant in the US.

However, though the plant requires far fewer resources for operation, the human resources involved, the talented people operate at a much different level than the steel mills of the past. We share a huge concern, with Bill and Melinda Gates (see the Western Hemisphere will not be able to compete in world markets for the top talent that companies like Castrip LLC and its owners must have in order to survive. With dismal student scores in math and science compared to other countries in the world, the United States has work to do.

Castrip is a registered trademark of Castrip LLC.

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