casting industry
Q. Do you think Kappmeyer should sign the proposal? Why or why not?
Ans. I think Kappmeyer should not sign the proposal. My recommendation is based on understanding the basic nature of disruptive technologies, and their future impact on the steel industry. Kappmeyer is currently making the decision based on short-term gains. With this proposal USX will have 2.6M ton capacity which 3 times greater than Nucor’s 0.8 M ton but the conventional method is not sustainable on a long term basis. CSP technology currently does not fit in Kappmeyer’s upgrade of the Mon Valley plant due to physical locations, feasibility, quality and other factors. But the CSP technology has shown improvement and with more R&D, CSP will surpase the conventional technology in the future. Capital costs were going to lowered from $1000 to $300 which would decrease USX’s costs in the future and hence increase profits. Instead of combining the plan of adoption of CSP and upgrade of the Mon Valley plant, USX should think about investing in CSP technology separately and not upgrade their Mon Valley plant.
Q. What position should USX take with respect to CSP technology? Should it invest in a greenfield CSP-based plant? Acquire a mini-mill? Invest in R&D on CSP technology? Something else?
I think USX should invest in R&D on CSP technology. The main problems for implementing the CSP technology at USX plants are:
1) Capacity for CSP technology plants is lower than conventional USX plants.
2) Conventional plant structure is different to the structure required for CSP technology.
3) The product quality is not equivalent to the current quality of conventional plants.
USX should stay competitive in the market in terms of quantity and quality, but they should also invest in a long term sustainable.
USX should go ahead with forming a joint venture with an existing minimill using the CSP technology for improving the technology. I think if USX invest in a CSP based plant, they will face
Ans. I think Kappmeyer should not sign the proposal. My recommendation is based on understanding the basic nature of disruptive technologies, and their future impact on the steel industry. Kappmeyer is currently making the decision based on short-term gains. With this proposal USX will have 2.6M ton capacity which 3 times greater than Nucor’s 0.8 M ton but the conventional method is not sustainable on a long term basis. CSP technology currently does not fit in Kappmeyer’s upgrade of the Mon Valley plant due to physical locations, feasibility, quality and other factors. But the CSP technology has shown improvement and with more R&D, CSP will surpase the conventional technology in the future. Capital costs were going to lowered from $1000 to $300 which would decrease USX’s costs in the future and hence increase profits. Instead of combining the plan of adoption of CSP and upgrade of the Mon Valley plant, USX should think about investing in CSP technology separately and not upgrade their Mon Valley plant.
Q. What position should USX take with respect to CSP technology? Should it invest in a greenfield CSP-based plant? Acquire a mini-mill? Invest in R&D on CSP technology? Something else?
I think USX should invest in R&D on CSP technology. The main problems for implementing the CSP technology at USX plants are:
1) Capacity for CSP technology plants is lower than conventional USX plants.
2) Conventional plant structure is different to the structure required for CSP technology.
3) The product quality is not equivalent to the current quality of conventional plants.
USX should stay competitive in the market in terms of quantity and quality, but they should also invest in a long term sustainable.
USX should go ahead with forming a joint venture with an existing minimill using the CSP technology for improving the technology. I think if USX invest in a CSP based plant, they will face