BlueScope unveils plan for the future

BlueScope Steel made a 20-year commitment to steelmaking in Wollongong yesterday when it announced it had moved its $372 million No 5 blast furnace reline forward by four to six weeks.The decision to proceed ahead of schedule at Port Kembla's biggest project since 1996 was made because lower demand for steel products meant there would be less disruption to production.The reline will coincide with two other major capital investment projects at the steelworks with a combined value of $530 million that will generate up to 1400 jobs in the next six months. BlueScope believes they will provide more job certainty for employees and generate activity for many local contractors.People and organisation performance general manager Barb Bridger said it showed BlueScope's confidence in the future of steelmaking in the Illawarra."Our goal is to get through this period and come out the other end with our workforce," she said.Australian and New Zealand steel manufacturing businesses chief executive Noel Cornish said it was also great news for the community, contractors and the company's shareholders. "We will effectively close out half of our iron-making capacity for a period when orders are not there to support the production and sales in any case."We are well prepared for the reline and this earlier start will allow us to handle any unknowns that might present once we stop the furnace and get inside it."Mr Cornish said the reline would help support the Illawarra in a soft business climate."The project will provide work for our own engineers and tradespeople as well as the local contracting community."There will be up to 1000 people visiting our region to work on the reline and sinter plant upgrade and they will be looking for local businesses for accommodation, meals and entertainment."BlueScope capital investment vice-president Phil Smith confirmed the reline, 35-day sinter plant upgrade and another project being undertaken by Australian Steel Mill Services would provide work for around 1400 people and had a combined capital value of around $530 million.Accommodation houses are expected to see an increase in activity in February, just after the busy summer holiday season.Blast furnace reline project manager Ian Boddy, of Hatch, said 300 people were now on site doing civil, mechanical, scaffolding, piping and electrical cable work.Steel manufacturing businesses iron and slab general manager Oscar Gregory said it was essentially a two-decade commitment to steelmaking in the Illawarra."A blast furnace specifically runs 15 to 20 years and our next reline (of the No 6 blast furnace) won't be until around 2016."Construction of the $478 million No 6 blast furnace occurred between 1993 and 1996.The timeline is for the No 5 blast furnace to shut down between January 18-25 and the actual reline to begin on March 1.It will take 105 days and be completed on June 13, when more staff will have been brought in for the commissioning phase.Around 350 people will be on site in late January and 1000 by early April, most from the Illawarra.The $133 million sinter plant upgrade, with 220 people, will run concurrently from March to June.Australian Steel Mill Services is also engaged in a significant $30 million upgrade of its assets near the slag handling facilities.Its contractors are well advanced on preparations for the project, which is expected to employ up to 200 people.Increased industrial activity for two BlueScope projects began four months ago."Most of the contractors we are using on the reline are all predominantly local companies that we deal with on a regular basis," Mr Smith said.BlueScope also delivered an update on its capital investment initiatives to the stock market yesterday, saying it had signed an underwriting agreement for an equity placement to institutional investors to raise gross proceeds of $300 million at $3.10 a share for a number of projects.Ms Bridger said the announcement showed BlueScope Steel was not only moving business forward but that there was also investor confidence in the company.Meanwhile, the $1 billion-plus co-generation plant proposal is still being considered.