AUSTRALIA
COATED AND BUILDING PRODUCTS
EARNINGS WERE LOWER FOR THE YEAR BUT THE BUSINESS FINISHED FY2006 ON A STRONG NOTE WITH RECORD SALES DESPATCHES IN THE LAST QUARTER. WE CONTINUE TO IMPROVE OUR MARKET OFFER, INTRODUCING NEW PRODUCTS LIKE COLORBOND® PERMAGUARD® AND TRUECORE® STEEL.
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NUNAWADING, VIC., AUSTRALIA |
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Today nearly half the new homes in Australia boast a COLORBOND® steel roof, and nine out of ten new homes feature products made from COLORBOND® steel. |
A CHALLENGING YEAR
Australian Manufacturing Markets' business takes slab and hot rolled coil from the Port Kembla Steelworks to manufacture and supply innovative steel products to the building and construction, manufacturing and automotive industries.
We are Australia's largest supplier of metallic coated and painted steel. Our business is renowned for its strong product portfolio and brand names. COLORBOND® and ZINCALUME® steels remain market leaders in Australia, well known for their wide range of applications across various market segments.
In 2006 we celebrate the 40th birthday of COLORBOND® steel. The brand has built an enviable reputation. Today, nearly half the new homes in Australia boast a COLORBOND® steel roof, and nine out of ten new homes feature products made from COLORBOND® steel.
We continue to improve our market offer, with initiatives such as the introduction of COLORBOND® Permagard® steel offering biological protection to food cool rooms, and TRUECORE® steel - our blue steel product - for residential building frames and trusses.
In 2005/06, a number of factors led to a difficult year for this business. Reduced domestic demand in the packaging, manufacturing and distribution markets, lower export prices, higher zinc and aluminium coating metal costs and the fire at Western Port early in the financial year, all contributed to lower revenue and earnings.
In June, the Company announced its decision to close the tin mill at Port Kembla. Market forces over recent years - the combined effect of low-cost imports, skyrocketing raw material costs, increasing use of alternative packaging and consumer trends away from canned food - have worked against the tinplate operations such that the business is no longer profitable.
RICHMOND, VIC., AUSTRALIA
A façade of folded COLORBOND® steel on townhouses.
WESTERN PORT
Western Port has an important role in BlueScope Steel's manufacturing, automotive and building industry supply chain in the southern part of Australia. The facility converts steel slab into hot and cold rolled coil and metallic coated and painted steel products including ZINCALUME®, TRUECORE® and COLORBOND® steels.
A fire in the electrical control room of the hot strip mill at the Western Port facility early in the financial year disrupted production for 12 weeks, and contributed to lower earnings. Thanks to employees' determination and effort, the repair work was completed as scheduled, with capacity restored by November, and minimal disruption to our customers.
Domestic and export despatches in the last quarter of the year achieved their highest levels since 1996.
Work to increase the capacity of the No. 4 metal coating line was completed and successfully trialled. Total metal coating capacity will increase by up to 30,000 tonnes in early 2007.
ILLAWARRA COATED PRODUCTS
The Illawarra Coated Products facility, adjacent to the Port Kembla Steelworks, includes a cold rolling mill, metallic coating and painting lines, finishing processes and Packaging Products.
In 2005/06, a number of new production records were set. Paint line production was up 15 per cent to a record 182,000 tonnes for the year, following the completion of the oven extension project which improved operating time and increased line speed. The No. 1 metal coating line furnace upgrade also led to a 20,000 tonne increase in ZINCALUME® steel production, and the No. 3 metal coating line achieved its best annual production level since 2003.
Work has begun to ensure the orderly closure of the tin mill operation. Good progress is being made, in consultation with employees, customers and suppliers. The Packaging Products pickle line and cold mill operations will remain open and supply feedstock to BlueScope Steel's metal coating lines in Australia and Asia, as well as to external customers.
SERVICE CENTRE NETWORK
A large proportion of Australian sales of coated and painted products are channelled through BlueScope Steel's network of seven Service Centres. The Service Centres process flat steel products for the building and construction, automotive, whitegoods and rural sectors. Two Service Centres also operate paint lines.
Brisbane's Acacia Ridge Service Centre delivered a record annual production of 93,000 tonnes of COLORBOND® steel following the implementation of process improvements to improve the efficiency of its paint line.
The WA Service Centre in the Perth suburb of Forrestfield was officially opened in November 2005. This represents a significant investment by the Company in Western Australia, in recognition of the opportunities offered by favourable economic conditions, low unemployment and strong growth forecasts. A new warehouse was opened at Wingfield, South Australia in May to allow us to more efficiently serve our customers in that market.
The construction of the $150 million COLORBOND® steel centre in Western Sydney is on schedule for completion mid-way through 2007. This facility will have a production capacity of 120,000 tonnes per annum, placing the Company in a strong position to meet market demand in one of the fastest growing regions in Australia.
BLUESCOPE LYSAGHT HAS DEVELOPED A STRONG REPUTATION FOR RELIABLE SERVICE, PRODUCT QUALITY AND A FOCUS ON CUSTOMER SUPPORT. BLUESCOPE WATER IS ESTABLISHING NEW MARKETS AND PROVIDING ADVICE ON WATER SAVING INITIATIVES TO MAJOR RESIDENTIAL PROJECTS.
BLUESCOPE LYSAGHT
The downstream BlueScope Lysaght business distributes and manufactures an extensive range of steel building and home improvement products. These include roof and wall cladding, rainwater goods, steel house framing, fencing, and structural products manufactured primarily from COLORBOND®, ZINCALUME®, DECKFORM® and GALVASPAN® steels. LYSAGHT® branded products are marketed to the building and construction sector through a network of BlueScope Lysaght sites across Australia.
BlueScope Lysaght has developed a strong reputation for reliable service, product quality and a focus on customer support. Working closely with customers, BlueScope Lysaght offers individually designed and installed building solutions through its design and construction capability.
During the year, BlueScope Lysaght maintained its market position, despite strong competition, which included suppliers using imported feed product.
A number of initiatives have been introduced to further strengthen and complement BlueScope Lysaght's manufacturing, sales and distribution capabilities.
The LYSAGHT® Design Test Centre and the roll-to-roof capabilities of the mobile rollformer support architects and builders to use LYSAGHT® products in innovative ways. BlueScope Lysaght encourages design innovation, and these new facilities allow customers to push the boundaries - without the risk.
In Queensland, we have experienced strong growth in demand for LYSAGHT® branded products, and have opened the new Sunshine Coast Service Centre and a new purlin mill in Brisbane to respond to the state's expanding building and construction market.
Acquisitions made over the last two years continue to perform well. The Ranbuild shed and garage business is seeing growth from improved product designs and an expanding reseller base. In Western Australia, Trustek Australia is benefiting from the state's strong economy as it flows on to the building and construction industries.
SYDNEY, NSW, AUSTRALIA
Document management company Recall's landmark barcode building is clad in 21,000 square metres of LYSAGHT INTEGRITY® 820.
Trustek, a steel roofing specialist, uses its specifically designed and patented TrussGEN® software program to create individual roof designs.
Lysaght Home Improvements has opened new display sites in Sydney and Melbourne. It is soon to expand to Brisbane, and a distributor network is being developed in regional centres, offering customised design and installation of a variety of home additions.
BLUESCOPE WATER
The BlueScope Water business was established in 2004 in response to the increasing demand in domestic and commercial markets for innovative products to manage water storage. A number of market and product development initiatives have further consolidated BlueScope Water's position as a supplier of premium rainwater harvesting products and storm water, culvert and irrigation infrastructure systems.
Perth based Pioneer Water Tanks, acquired in May 2005, is a leading supplier of water tanks in the rural, commercial and industrial market sectors. During the year, the business entered new domestic and export markets and enjoyed strong growth in sales revenue.
The Urban Water business has consolidated its presence as a supplier of rainwater harvesting solutions in Queensland, New South Wales and Victoria and expanded its retail presence with the opening of two additional retail outlets.
New construction activity has developed well, albeit with different legislative environments in the three states. The business experienced continued strong growth with sales revenue almost doubling in FY2006.
BlueScope Water is establishing new markets and providing advice on water saving initiatives to major residential projects. Partnerships have been established with a number of property developers to supply rainwater harvesting systems for new housing estates in the eastern states of Australia. These systems offer homeowners the potential to significantly reduce household mains water consumption.
New products have been launched including the WaterPoint® Inground System which is designed for underground water storage in residential and industrial applications. The AGRIRIB® pipe product was also launched during the year to meet the emerging market for piped irrigation channels.
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MARGARET RIVER, WA., AUSTRALIA |
