Business
Stelco Completes its Operational Improvement Program
Stelco Completes its Operational Improvement Program.
About this update from Starr Peak Mining Ltd
[{"type":"text","content":"\n\n\n\n Resulting Fourth Quarter loss will be $120-140 million\n\n\nHAMILTON, ON, Feb. 7 /CNW/ - Stelco Inc. (TSX:STE) today announced that\nit has completed the major components of the operational restructuring that it\ncommenced upon exiting from the CCAA process. This operational restructuring\nhad three key components:\n\n\n- Productivity improvement initiatives and reduction in the labour\n force.\n\n- Reducing production costs through workflow improvement.\n\n- Optimizing capital projects.\n\nIn order to complete this program, it was necessary to close certain\nproduction facilities for a period of time during the fourth quarter. These\nshutdowns coincided with a softening in demand for steel. The net result of\nthese initiatives is that Stelco expects to report a loss before income taxes\nin the range of $120 million to $140 million for the fourth quarter ending\nDecember 31, 2006.\nThe closure of production facilities enabled the company to successfully\ncomplete several strategic capital projects, including:\n\n- the reline and upgrade of the blast furnace at the Hamilton plant to\n significantly increase throughput and to extend the interval for the\n next furnace reline to 2018; and\n\n- the Phase II expansion of the Lake Erie hot strip mill, which is\n expected to increase throughput by 20% over previous levels.\n\n\nWith these two major projects now complete, Stelco does not anticipate\nany further significant mill outages in 2007.\n\n\nAs mentioned above, fourth quarter results were also adversely impacted\nby lower demand in the automotive and steel service centre sectors, which\ncontributed to a reduction in spot prices for steel and shipments during the\nquarter. In addition, higher costs were incurred due to increases in the cost\nof energy and certain raw materials.\n\n\nMr. Rodney Mott, President and CEO stated that, \"The economic outlook for\n2007 appears positive and the demand for steel has improved markedly.\"\nShipment and semi-finished steel production in January improved significantly\nover the respective monthly averages for the fourth quarter. January shipments\nwere 309,000 tons and semi-finished steel production was 380,000 tons, which\ncompares to fourth quarter monthly averages of 225,000 tons and 204,000 tons\nrespectively. Spot prices have also improved for January as compared to the\nfourth ...