2001 Annual Report - OneSteel

ssVertically-Integrated OperationsOneSteel has vertically integrated operationsfrom the iron ore mines in Whyalla, throughto steel production, long steel productsmanufacture and customer distribution networksthroughout Australia.This provides the company with the opportunityto build a highly market focused business wherecustomer purchasing signals can be easilytranslated back into the production andmanufacturing process.Flexible Steel ProductionOneSteel has two main steel facilities – anintegrated steelworks in Whyalla which convertsiron ore into steel, and a steel mill in Sydneywhich utilises electric arc furnace technology tomelt scrap metal to produce steel. Together thesefacilities produce approximately 1.7 milliontonnes of steel per annum.With its own iron ore mines providing low costraw materials, Whyalla Steelworks providestwo-thirds of OneSteel’s steel requirements, whilethe Sydney Steel Mill, with its ability to quicklyvary production levels, provides the capability tovary output levels to match market requirements.Combined, these facilities give OneSteel thecapability to produce highly specialised steel andsteel products that can demand premium prices.FACING THE CHALLENGESThe challenge for OneSteel is to harness thesestrengths to deliver increased value. In the past,as part of a much larger organisation, OneSteelbusinesses were not fully integrated, and as such,there were duplicated functions. This meant therewere many points of contact for customers andthe potential for coordinated market offerings ofa range of products was not completely realised.It also meant that the signals to fully alignproduction with market demand were not clear,increasing the potential for production and marketdemand to be out of step.The restructuring task to bring OneSteel togetheras one business is immense. On the company’slisting on the Australian Stock Exchange on23 October 2000, OneSteel managementembarked on the restructuring path withachievements to date outlined in the ManagingDirector’s Review.The key strategic thrusts underlying therestructuring of OneSteel can be summarised as:• Being the customers’ preferred supplier;• Improving operating performance;• Optimising the business portfolio;• Investing in people; and• Focused strategic expansion.The company still has a long way to go toachieve its vision. Some hard decisions havealready been taken and measures put in place tomake OneSteel a much more market-sensitive andefficient business. A clear course of action hasbeen set, and some significant achievementsmade in the company’s first eight months ofoperation as a publicly-listed corporation.CUSTOMER SERVICE: OneSteel Wire “Supplier of the Year” Awarded by CRT – February 2001Photo (left to right) – Neil Gibson, OneSteel; John Hughes, CRTOneSteel was awarded the “Supplier of the Year” Award at the annual CRT (Combined Rural Traders)Trade Exposition. This is the 4th time OneSteel has won the award in the last five years. The “Supplier ofthe Year Award” is decided upon by CRT members who rate suppliers on various elements of the business.The elements include product quality, sales support, customer service, support in new product launches,advertising and promotions, distribution and overall perception of the supplier company.3