Item 6.4 in Project Plan. Smorgon Steel origin / connection.

Talk of a Smorgon steel / Onesteel Merger in August 2006 was countered by Bluescope buying in 19.9% of Smorgon Steel to "ensure that the OneSteel/Smorgon Steel merger proposal does not proceed in its current form".
http://www.bluescopesteel.com/go/news/bluescope-steel-acquires-stake-in-smorgon-steel
Accessed 7/9/09

The Australian Competition and Consumer Commission ("ACCC") reveiwed proposals for Merger between the three businesses (Bluescope, Smorgon and OneSteel and approval was given 7th June 2007
http://www.bluescopesteel.com/go/news/smorgon-steel-/-onesteel-/-bluescope-steel-transactions-cleared-by-accc
Accessed 7/09/09

BlueScope Steel today announced it has acquired Smorgon Steel's metal distribution business (Smorgon Steel Distribution) .
As part of the transaction, BlueScope Steel has sold its 19.9% stake in Smorgon Steel to OneSteel

http://www.bluescopesteel.com/go/news/introducing-bluescope-distribution
Accessed 7/9/09

Interview Questions

I couldn't see a thread discussion for the Interview Questions so here are mine- sorry they have a financial bias- still have my head in the numbers..

1. Is there a graph which represents surplus capacity in a supply and demand graph similar to this one from Corrus Steel in 2005?
2. Days in Inventory appears to have reduced in 2009. Is this a result of deliberate planning or is it a product of the factors in question 1? What methods are being used to reduce inventory in the sales process- IE blast furnace reline, planned delay of blast furnace start up etc
3. Has there been a conscious effort to reduce days in debtors to improve cash flow from operations in 2009?
4. Property, Plant and Equipment (PPE) payments have grown substantially from 2002 ($78m) to 2009 ($733m). It appears from the financial performance that BlueScope are financing most of their assets from shareholder equity as opposed to debt. Is this a conscious strategic decision or did the strong revenue growth in 2005/6 enable a better debt position?
5. It is noted that a sharp reduction in debtor payables between 2008 ($1.282b) and 2009 ($940m) was recorded. Given the reduction in business activity over the same period, is this a product of effective debtor management or is it strictly related to operational revenue?
6. Are days in inventory a concern for BlueScope? This ratio decreased by 10% in 2009 but is still on average more than 55days. Is this a risk of obsolescence, does it erode profit through storage and insurance costs?
7. Sustainability is clearly a focus and source of strategic advantage for BlueScope. The water conservation initiative has saved over 14b litres of freshwater at Port Kembla since October 2006. Does the business consider the implementation of a carbon trading scheme to offset some of the gains made by efficient water conservation?
8. What political influence has BlueScope had in customising the government’s Carbon Pollution Reduction Scheme (CPRS) proposal to protect its competitive position in the Australian market? Has BlueScope and One Steel arrived at a combined position to drive government attention to the side effects (reduced export capability) of the proposed scheme?
9. Acquisitions such as Smorgon Steel, HCI Building Systems and IMSA Steel Corp form the basis of increased competitive advantage. Is this likely to feature in the strategic approach going forward or has BlueScope reached a critical mass?
10. Can BlueScope quantify it’s R&D capital fro the period 2002 to 2009 and forecast this into the medium and long term?
11. It is noted that the are several categories of initiatives contained in the 2008 Blueprint- grow domestic markets and steel penetration; drive manufacturing excellence; enhance supply chain; continue focus on productivity; procurement optimisation; improve capital planning and execution; monetise surplus assets; disciplined growth. Has the blueprint changed in 2009 and is it aligned to the BlueScope Bond- Customer, People, Shareholders, Community.
12. Has BlueScope recognised any efficiency in the establishment of a PMO in 2008? This office is reported to be tracking more than 120 initiatives aimed at EBIT and working capital improvements.

Bluescope Marketing Material

Bluescope utilize Television, print media and have developed "Brand Partnership Program" with businesses utilizing Bluescope steel.

Liks to Television and Print Media.
Advertising sites

http://www.colorbond.com/index.cfm?objectid=FF97D12A-C23D-69B5-53600FF4F7DFC3AD
Accessed 2/9/09

http://www.bluescopesteel.com/go/news-and-media/advertisements
Accessed 2/9/09

http://www.bluescopesteel.com.au/go/tools-and-resources/steel-by-program/how-we-ll-help-you
Accessed 3/9/09


Press releases

http://www.bluescopesteel.com.au/go/news/what-s-behind-zincalume-steel
accessed 2/9/09

http://www.bluescopewater.com/index.cfm?objectid=B87C8883-A3B6-7C77-255615291BBCBF20
accessed 2/9/09

I also had a go at interveiwing one of the "Brand Partnership Program" members.

This was interesting as he perceived price being ultimately the most likely determinate of steel selection within his area of steel usage.

I am in the process of writing up a second interveiw i held this morning with Mr Alan Hall, Research Technician with our business and previously the coated product lines (Zincalume, Galalume, Zincanneal, coulourbond , aquaplate lines.

There is quite a lot on capabilities and technological resources available.

I will post both interveiws in Wiki Shortly.

Top 5 Customers (Point 15 in Meeting Minutes)

Guys,

Since I cannot add the excel sheet to the blog.
I have emailed you all the Top 5 customers for Bluescope ex Westernport in VIC based on tonnage.

Vlade

Coal/ Steel background

Financial forecasts when BHP and Bluescope demerged

http://www.bluescopesteel.com/file/download.cfm?DownloadFile=4AFC2142-AF4F-4973-897591EE555DBA5A

Comments on Assignment 2

1. As we research we should start to get a clearer picture of Bluescope and its strategy. From this we can start to analyse using SWOT as a basic tool.
2. Agree with Arv. We can use Porters 5 Competitive forces model and PESTLE to understand the effect of the external and internal environment on the organisation.
3. Units 3 can help us with the external environment, Unit 4 can assist with understanding the strengths and capabilities of the organisation and Unit 5 has tips on agility.
4. Unit 10 should help us with section 2 as we analyse and dissect the organisation across divisions and borders.
5. Units 6 and 7 are more technology and innovation focused and I think should assist us with section 3 of our project document.

I think we should nominate 5 questions that we want to present to Bluescope, here are some examples:
1. What is the strategic intent of the organisation for the next 3 years?
2. How is Bluescope using innovation/technology to gain a competitive advantage?
3. What innovating techniques is employing/ has employed?
4. What type of strategy will be used to remain competitive in the global market?
5. What is its current balance sheet and ROI?