BlueScope Steel Chairman, Graham Kraehe, has announced the Board’s approval for a major restructure of Australian operations to reposition the company for improved profit and growth.
“We are experiencing significant economic challenges and structural change in the global steel industry. The restructure, which includes shutting down the No.6 Blast Furnace at Port Kembla and closing the Western Port Hot Strip Mill, will better align Australian steelmaking production with Australian domestic demand and see BlueScope exit the Australian export business,” says Kraehe.
“The restructure announced today will produce a more viable and sustainable Australian steel business and allow us to focus clearly on domestic markets and international growth opportunities. It will also lower fixed costs at our major facilities at Port Kembla (NSW) and Western Port (Victoria).”
“We are committed to making steel in Australia and can now prioritise our resources and efforts towards even better service for our domestic customers.” BlueScope Managing Director and CEO, Paul O’Malley says the company was experiencing a combination of economic challenges due to the influence of the record high Australian dollar, low steel prices and high raw material costs.
“The restructure will better position us for profit and growth in Australia and allow us to grow our presence in building construction markets, in particular Pre-Engineered Buildings, where we are a world leader. We will also focus on growth opportunities, particularly in Asia,” says O’Malley.
“The Company has a strong competitive advantage in coated steel with its world class ZINCALUME® and COLORBOND® steel products. In collaboration with Nippon Steel Corporation, we will develop the next generation of coated products for our customers. We expect these products to be launched initially in Australia and then rolled out across the Company’s global footprint.”
According to O’Malley, BlueScope Steel has taken several initiatives, over the last 12 months, that would help establish the company’s future.
“It’s the right decision for the long-term viability of our business. The Company has the support of its lenders to undertake the restructure. We will now enter a consultation process with our employees and affected stakeholders, including customers, unions, contractors, suppliers, governments and local communities,” says O’Malley.