BlueScope may close Australian steelmaking
BlueScope Steel has called for government support and sacrifices from its workforce to secure the “game-changing” cost reductions it says are necessary to save its Australian and New Zealand operations.
The steelmaker has returned to profitability but says falling demand from China means it will be cheaper to source steel substrate from overseas unless it reduces workforce, environmental and tax costs.
BlueScope managing director and chief executive officer Paul O’Malley on Monday said the company aims to save more than $200 million per year in Australia, and another $NZ50 million ($A45.66 million) in New Zealand, by 2016/17.
“If this target is not achievable, we will have no option but to move to external supply of quality hot rolled coil and billet steel feed with mothballing or closure of steelmaking,” O’Malley said.
BlueScope wants state and federal government to reduce payroll tax, environmental and WorkCover costs, and to defer carbon costs.
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It also called for “firm commitments to a more flexible and productive approach to labour in the Illawarra (in NSW) and the Waikato (NZ).”
The move comes as the company announced a profit of $136.3 million for the year to June 30, up from a loss of $82.4 million a year ago when the company was hit with one-off restructuring costs and writedowns.
The company expects its 2016 first-half underlying earnings before interest and tax to be similar to the last half’s.
BLUESCOPE’S BLUES
- Net profit $136.3m vs $82.4 loss
- Revenue up 7pct to $8.572b
- Final dividend three cents per share, up from none.
