Steel company announces major restructure

BlueScope Steel Managing Director and Chief Executive Officer Paul O’Malley said the company is experiencing an unprecedented combination of economic challenges in the form of a record high Australian dollar, low steel prices and high raw material costs. These challenges are compounded by low domestic steel demand in the wake of the global financial crisis.

As a result, BlueScope Steel will undertake a restructure plan which, once fully implemented, will result in the shut-down of a number of its facilities, the company’s exit from the Australian export business, and a workforce reduction of around 1,000 people.

The company will be focusing on the domestic market and will continue to service the pipeline industry.

In response to the restructure announcement, the Federal Government has decided to introduce a new advance facility into its Steel Transformation Plan (STP). The STP was announced in July this year to provide assistance worth $300 million over five years from 2012-13 to the Australian steel industry.

This new facility will allow eligible participants to draw down an advance of their future entitlements under the STP in order to address short-term cash flow issues and help the industry become more efficient and sustainable. It will allow BlueScope to bring forward into 2011-12 up to $100 million of the payments nominally allocated to it under the STP.

In addition to the new STP advance facility, the Government will also provide immediate and practical support to workers and communities affected by the BlueScope restructure in the form of funds, Centrelink and Job Services Australia assistance, and the appointment of Secretary of the Department of Innovation, Industry, Science and Research Dr Don Russell to lead a whole-of-Government response to the BlueScope announcement and to work with local stakeholders on a co-ordinated structural adjustment strategy for the region.

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