| September 2006 |  |
| Metal Industry News | |
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Wheeling-Pitt Pushes CSN Deal; James G. Bradley, chairman and CEO of Wheeling-Pittsburgh, says the company has completed negotiations with CSN on most major issues. “Since emerging from bankruptcy in 2003, our board of directors has evaluated a broad range of options for maximizing value for our shareholders. The proposed transaction with CSN is the culmination of an extensive and rigorous process, which included exploratory discussions with a broad range of potential partners,” Bradley says. “CSN is a low-cost Brazilian producer of 5.6 million metric tons of steel, and this transaction presents Wheeling-Pittsburgh with a unique opportunity to improve scale and production, generate significant operating efficiencies and broaden our product portfolio,” he adds. “Our board strongly believes that the proposed transaction with CSN offers our shareholders the most compelling value proposition over the long term and, in particular, will deliver significantly more value than the most recent proposal by Esmark.” Esmark, however, is not deterred in its effort to acquire Wheeling-Pitt. The Chicago-based service center company’s bid recently won the support of the United Steelworkers. “We are pleased, but not surprised, that the United Steelworkers has announced its strong support for the proposed Esmark transaction,” says Jim Bouchard, Esmark CEO. “Our vision is to combine the best of minimill production and downstream distribution resulting in a rebuilt Wheeling-Pitt. We are creating a regional steel company nimble enough to succeed in the rapidly evolving steel industry.” Bouchard says three factors are crucial to the growth of Wheeling-Pitt: a good working relationship between workers and management, a large customer base in the Midwest and a reduction of the mill’s debt. “Esmark has a comprehensive plan to accomplish this vision. We have chosen a talented group of mill managers and slated an experienced and diverse group for Wheeling-Pitt’s board of directors.” Esmark also will continue its strategic dialogue with Steel Dynamics Inc. of Fort Wayne, Ind., regarding technology sharing, management consulting and next-generation raw material projects, Bouchard adds. Last month, Wheeling-Pitt reported a second quarter net income of $9.3 million, an increase of 257.6 percent from the same period in 2005. Net sales for the quarter totaled $493.9 million, up 18.9 percent from the second quarter of 2005. Net sales for the second quarter of 2006 and 2005 included $15.0 million and $27.0 million, respectively, from the sale of excess raw materials. Net sales of steel products for the second quarter of 2006 totaled $478.9 million on steel shipments of 667,944 tons, or $717 per ton. Net sales of steel products for the second quarter of 2005 totaled $388.2 million on steel shipments of 546,688 tons, or $710 per ton. The increase in net sales was due to an increase in the volume of steel products sold and an increase of $7 per ton in the average selling price of steel products, offset by a decrease in the sale of excess raw materials. “These results reflect our employees’ total commitment to building Wheeling-Pittsburgh into a reliable steel producer that creates value for our shareholders and customers,” Bradley comments. “That commitment, together with major investments we have made in our primary operations and strategic improvements involving our finishing mills, have contributed to improved quality and lower costs.” Schorsch to Oversee In this new role, Schorsch will lead the integration and executive management of flat-rolled operations in the Americas. This includes integration and oversight responsibilities for CST and Vega do Sol in Brazil, Mittal Steel Lazaro Cardenas in Mexico, Mittal Steel USA, and the flat-rolled operations of Mittal Steel Canada. “We believe there are tremendous operational opportunities, and strategic and synergy benefits, to be captured in the new Arcelor Mittal American flat-products division,” says Aditya Mittal, chief financial officer of Arcelor Mittal. “The appointment of Lou and the management changes at the U.S. operations will be key to achieving a higher level of benefits, as well as performance. Lou has distinguished himself as a proven leader within Mittal Steel and has played a critical role in the successful integration of the ISG acquisition in the U.S.” In other management changes, Mike Rippey has been selected to succeed Schorsch in the role of president and CEO, Mittal Steel USA. Rippey previously served as Mittal USA executive vice president, sales and marketing. “Mike has made tremendous contributions towards establishing the Mittal Steel brand in the U.S. market and in building a ‘best-of-the-best’ commercial organization,” Schorsch says. “In his new role, he will bring the same mindset and performance orientation to all of Mittal Steel USA, building on the successes we have achieved to date.” Executive Vice President of Operations Bill Brake is leaving the company to pursue other opportunities. Succeeding Brake as executive vice president of operations is Len Chuderewicz, who has been heading operations at Mittal Steel-Indiana Harbor, the company’s largest plant in the U.S. Rippey’s appointment to president and CEO of Mittal Steel USA led to the selection of Dan Mull as executive vice president of sales and marketing. Mull had been vice president of marketing for Mittal Steel. Investment Firm Aleris board members unanimously approved the merger agreement and urged stockholders to adopt it. “After careful analysis, our board of directors has unanimously endorsed this transaction as being in the best interests of our stockholders,” says Steven J. Demetriou, Aleris chairman and CEO. The company’s global headquarters will remain in Beachwood. Kaiser Extends Long-Term “Kaiser Aluminum and Boeing have a long history of partnership, and this agreement further solidifies the long-term relationship between the two companies,” says Jack A. Hockema, Kaiser chairman, president and chief executive officer. The contract with Boeing is enabled by a previously announced $105 million expansion at Kaiser Aluminum’s Trentwood Rolling Mill in Spokane, Wash. In other action, Kaiser has extended a contract with A.M. Castle & Co. to supply aerospace manufacturer Raytheon Aircraft Co. with high-quality fabricated aluminum products. The agreement extends an earlier contract to 2010 and calls for an increased supply of high-quality fabricated aluminum sheet and plate products. Kaiser Aluminum’s sheet and plate products will be utilized in the production of products for aircraft such as the Hawker 400XP, the Hawker 4000 super-midsize business jet, the Beechcraft Premier IA entry-level business jet, the Beechcraft King Air Series, and the T-6 trainer aircraft. Earlier, Kaiser announced an agreement with new Castle subsidiary Transtar Metals to supply Lockheed Martin and its partners Northrop-Grumman and BAE Systems with fabricated aluminum plate products for the Department of Defense’s F-35 Joint Strike Fighter, the Lightning II. The long-term contract will run through 2016, commencing with the production debut of the new aircraft in 2009. Kaiser reported a net loss of $2.5 million for the second quarter, the result of items related to the company’s reorganization. Sales for the quarter totaled $353.5 million, up from 34.5 percent from the same quarter in 2005. Turkish Steelmaker Borcelik to add Galvanizing Line The investment decision will boost Borcelik’s rolling capacity by 60 percent to 1.6 million tons, and will increase its galvanizing capacity to 900,000 tons. The new line is expected to open in the second half of 2008. Borcelik also announced it will acquire Borusan subsidiary Kerim Celik, a steel service center serving various industries. “This investment will contribute to foster Borcelik’s leadership in Turkey’s high growth market for galvanized steel,” says Michel Wurth, Arcelor Mittal’s senior executive vice president in charge of Flat Products Europe. Schnitzer Steel Acquires “This acquisition is consistent with our strategy of expanding our presence in New England and leveraging the infrastructure investments we have been making at our facilities in the area,” says John Carter, Schnitzer’s president and CEO. “The Cohen family and Schnitzer together have a long history of experience in the recycling business, and this acquisition furthers Schnitzer’s dedication to customer satisfaction, protection of the environment and the promotion of recycling throughout the New England region.” Upon completion of the acquisition, Schnitzer has designated Steven Cohen, president of Advanced Recycling, as director of its Northern New England operations. The acquisition is expected to close within four months. ADS, Port of Shreveport The 60,000-square-foot heat and humidity controlled facility is operated by the ADS Roll & Hold division. The facility is rail served by the Union Pacific Railroad. The port’s marine, rail and truck infrastructure and equipment provide for high-volume rail activity as well as all bulk modal combinations of barge, rail and truck, with 2,000 acres of property, 10 miles of on-site track, barge capacity for 25-plus units at a time, and truck access adjacent to the I-20/I-49 intersection. “ADS is delighted with the opening of this new facility and looks forward to serving the region’s industrial base,” said Rich Doyle, director of marketing and sales for ADS Logistics. “ADS, working with the port, has identified a significant and growing need in the region for efficient multi-commodity logistics services, including warehousing and distribution, transload operations, truck transportation, and sophisticated information systems.” Northwest Pipe Completes Also, Northwest was named as pipe supplier to S.J. Louis of Mansfield, Texas, to supply approximately 67,000 feet of 84-inch-diameter steel pipe, valued at $26 million. The pipe is for the East Fork Raw Water Supply Pipeline, a project of the North Texas Municipal Water District. Delivery is scheduled to begin in the first quarter of 2007. Edgen Sales, Revenues Operating income was also up in the second quarter of 2006 to $8.3 million, a 13.6 percent increase from the previous quarter and up 5.4 percent from the same period in 2005. “We benefited from our continued focus on the sales of niche products to the energy infrastructure market,” says Daniel J. O’Leary, Edgen CEO and president. “Our expansion into the Canadian market in 2005 is providing us with opportunities in the oil sands region of Alberta, and our efforts in the alternative energy markets have resulted in steady sales growth.” Briefs Advanced Machine and Engineering Co. will celebrate its 40th anniversary on Sept. 14 at the company’s headquarters in Rockford, Ill., following the IMTS tradeshow in Chicago. Festivities will include an open house and plant tours from 2-5:30 p.m., Oktoberfest celebration and dinner for invited customers, suppliers, partners, employees, local business leaders and industry representatives. United Steelworkers Local 5668 have voted to ratify a three-year labor agreement covering 580 hourly workers at Century Aluminum of West Virginia’s Ravenswood aluminum reduction facility. The company had shut down one of the four potlines as a result of a July 29 notice to strike, and has begun to restart the line. Century estimates it will take up to three months to achieve full production on the line and at the plant. Kaiser Aluminum signed an agreement with Eclipse Aviation Corp. to supply aluminum fabricated products for use in the production of the Eclipse 500 revolutionary very light jet. The multi-year agreement calls for Kaiser Aluminum to be the primary provider of aluminum plate and sheet products commencing in calendar year 2007 for the 2,500 Eclipse 500 jets currently on order. Trumpf Inc., received town approval of its plan to construct a new laser facility on the company’s Farmington, Conn., campus. The laser factory is designed to consolidate the company’s local laser R&D, manufacturing, assembly, testing and sales operations. Trumpf also has announced that Hegman Machine Tool will serve as its new distributor in Nebraska and western Iowa, in addition to representing Trumpf’s line in Minnesota, North Dakota and South Dakota parts of Wisconsin. Trumpf also named Southern States Machinery Inc. as a distributor in Florida, North Carolina, South Carolina, and part of Virginia. SteelBoss.com celebrated five years of success on Sept. 4 with the launch of a new auction Web site, www.TotalBoss.com/Auctions. TotalBoss.com will host auctions for steel, various metals and scrap among other commodities, and will offer standard, blind and reverse auctions allowing users to host auctions to both buy and sell wholesale raw material products. MetalSuppliersOnline.com has announced a new network to match buyers and sellers of prime quality excess inventory. The system allows metal buyers to indicate the metals they buy and sign up for e-mail alerts whenever that material becomes available. Any company with prime certified excess inventory can list their metal on the Web site; then the system sends e-mail notices only to companies that are interested in the specific metal being listed. There are no fees for listing or selling on the network. Allegheny Ludlum, Pittsburgh, has received certification as a qualified producer under the NORSOK standards for certain flat-rolled products. The NORSOK standards are developed by the Norwegian petroleum industry and are intended to identify metals used in oil and gas applications that are safe and cost effective. Allegheny Ludlum is the only U.S. company with the certification. Vulcan Aluminum, Foley, Ala., has ordered two scrap choppers and a rotary-style flying shear from Butech Bliss, Salem, Ohio. One chopper will replace a scrap winder on an existing aluminum slitting line, while the other is part of an upgrade project on the company’s mini-rolling mill line. Talley Metals, a subsidiary of Carpenter Technology Corp., announced a 4 percent increase on all premium-melted alloys in bar form and a 3 percent increase on all air-melted stainless grades in bar form, effective Sept. 5 on all new orders and shipments. Raw material and energy surcharges remain in effect. Lone Star Technologies Inc., Dallas, has agreed to form a joint venture with Hunan Valin Steel Tube & Wire Co. Ltd., one of China’s largest steelmakers. Under the agreement, Lone Star would acquire a 40 percent stake in one of Valin Tube and Wire’s subsidiaries, Hengyang Valin MPM Steel Tube Co. Ltd., in the Hunan Province, for $132 million. Moscow-based Rusal has agreed to purchase 56 percent interest in the EurAllumina alumina refinery in Italy from Rio Tinto Aluminum. The transaction is conditional upon a pre-emption right of Glencore AG, the other shareholder in EurAllumina. People Geoff Aronson has been appointed international sales manager for DoALL Sawing Products. He will direct the sales strategy in China, India, other Far Eastern and South American countries. Paul C. Soucier has been promoted to Gibraltar Industries president of operations in the Construction Metals and Weather Guard divisions. He had been vice president of operations. Michael F. Tanchuk has been named vice president and plant manager at Nordural ehf, Century Aluminum’s subsidiary in Grundartangi, Iceland. Tanchuk replaces the retired Dick Starkweather. Matthew T. Powell will succeed Tanchuk as the plant manager at Century Aluminum Co. of Kentucky’s Hawesville reduction facility, where he had been operations manager. Martin Abbott has been named chief executive of the LME. He joined the LME from Metal Bulletin LLC, where he served as president and publisher of American Metal Market. |
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