Business
Stelco provides update on 2006 forecasts and targets
Stelco provides update on 2006 forecasts and targets.
About this update from Starr Peak Mining Ltd
[{"type":"text","content":"\n\n\n\n\nFocus on workforce, volumes and cost expected to increase profitability\nand productivity\n\nHAMILTON, ON, June 22 /CNW/ - Immediately following its Annual and\nSpecial Meeting of Shareholders being held at 10:30 a.m. Eastern Time today,\nRodney B. Mott, President and Chief Executive Officer of Stelco Inc. (TSX:STE)\nwill be speaking to shareholders about the Company's current state of\nbusiness, current priorities, and outlook for the business. In Mr. Mott's\npresentation, he will be providing new material information regarding a number\nof items, including estimated financial and production targets, cost cutting\ninitiatives and EBITDA targets. Please be advised that these targets represent\nobjectives being set by the Company, which it believes are achievable over\ntime. Further updates will be provided as required. Following is a review of\nthe items Mr. Mott will cover.\n\nUSW Local 1005 labour agreement: Stelco is pleased to announce today that\non June 21, members of the United Steelworkers Local 1005 ratified a four-year\nlabour agreement. The agreement was reached in advance of the July 31, 2006\nexpiry date of the existing labour contract.\n\nRevenue growth: Through a combination of an increased volume target of\n4.8 million tons per year, optimum product mix, and pricing, Stelco expects\nthat the Company can achieve revenue exceeding $3 billion per year, an\nincrease of 33% over 2005 actuals.\n\nWorkforce reduction plan: A workforce reduction plan has a target\nreduction of approximately 15% of the current employee base. This will be\nachieved through retirements, attrition, a salaried and hourly employee buyout\nplan and severance packages. Depending on participation, the estimated cost of\nthis program is $25 million. The resulting annual savings are anticipated to\nbe $45 million.\n\nProductivity gains: The Company has set a productivity objective of 1,220\ntons per employee, a 40% increase over current levels.\n\nOther cost-reduction initiatives: Through a number of other initiatives,\nincluding production volumes, changes to salaried employees benefits plans,\nprocurement strategies, energy management and elimination of contractors,\nStelco has identified an estimated $65 million in cost savings per year.\n\nCapital investment: The forecast for 2006 capital spending is\n$160 million, of which $54 millio...