2001 Annual Report - OneSteel

Key Business DriversFigure Six – Vertical Integration of OneSteel’s Australian OperationWHYALLA STEELWORKSIRON OREMINESIRON & STEELMAKINGMARKET MILLSDISTRIBUTIONMILLS• Structurals• Rails• SleepersSYDNEYSTEEL MILLWIRE MILLS• Wire• Rope• Fence PostsPRODUCT1MILLS• Rod• Bar• Pipe• Tube• Sheet & Coil 2• Steel• Piping Systems& Aluminium• METALAND ®• ReinforcingNon-residentialConstructionEngineeringConstructionResidential Other Mining Automotive AgricultureConstruction ManufacturingExport20% 20% 12% 13% 10% 5% 5% 15%1 Coil used to make pipe and tube is sourced outside of OneSteel.2 Sheet, coil and plate is sourced from outside OneSteel.NOTES FOR BUSINESS DRIVERSThe following graphs represent the majorbusiness sector drivers of OneSteel revenues.The most notable feature is the synchroniseddownturn that took place over 2000/01 in theconstruction and manufacturing sectors, whichwhen added together account for almost 65%of OneSteel revenues.A synchronised downturn in itself is an unusualoccurrence, but it was amplified by the severityof the downturn, especially in the residentialconstruction sector represented in Figure Nine.The main reason for the synchronised downturnwas the pulling forward of construction activityinto the 1999/2000 year related to the SydneyOlympics and the introduction of the GST.The remaining domestic sectors of mining,agriculture and automotive which representapproximately 20% of OneSteel revenuesrecorded increased levels of activity for the year.The remaining 15% of OneSteel revenuesapproximates OneSteel’s levels of Export.One of the key business drivers for OneSteel isthe level of import activity and the impact suchactivity can have on domestic pricing. Over thelast five years, whilst overall steel long productimports have remained relatively steady, therehas been a significant increase in some lowpricedimports within OneSteel’s long productsteel range.The impact of imports continues to be an areawhich OneSteel monitors and manages throughdomestic and international market strategies.Figure Seven – Non-Residential Construction ($m 1998/99)September quarter 1989 to June quarter 20015,0004,5004,0003,5003,0002,5002,0001,500Figure Eight – Engineering Construction ($m 1998/99)September quarter 1989 to June quarter 20015,5005,0004,5004,0003,5003,0002,5002,00089 90 91 92 93 94 95 96 97 98 99 00 018,0007,0006,0005,0004,0003,00089 90 91 92 93 94 95 96 97 98 99 00 01Figure Nine – Residential Construction ($m 1998/99)September quarter 1989 to June quarter 20012,00089 90 91 92 93 94 95 96 97 98 99 00 0112