Thursday, August 11, 2011

Rollforming Industry - Change in the Wind!

BlueScope Cuts Heavily

The article today in The Australian talks of streamling (cuts) that could strengthen (reduce costs) the company to look toward a merger. The only merger possible is One Steel. The ramifications of this are numerous including the life of Lysaght and the brands Colourbond and Zincalume. Iron ore, coking coal prices, a weak domestic market, strong Aussie dollar, and cheap shipping & costs for importers are making life very tough for BlueScope. Along with probably the most over paid and over staffed management in manufacturering companies in Australia - they have finally realised that cutting is the best way to organise a takeover! Before the GFC they were trading at $12.00 and now below the dollar? Asset sales, staff layoffs and blast furnace closure is one way to achieve profit (less loss) than current. Whyalla and Port Kembla will suffer big job losses. This is a concern to Australia. Lets sit back and import our steel sheeting (cheaper) that may be doubtful in quality. Australian Standards will be bypassed and our warranties will be useless.

How does this affect the rollforming industry - with a possible merger with One Steel. Wonder what the ACCC (toothless tiger) will make of this? These are some possible outcomes.
  1. Lysaght with big losses currently will also be sold off.
  2. Large Southern rollformer group looking at takeover of Lysaght in conjunction with new emerging powerhouse of the Eastern States. (Is everyone asleep in this industry?)
  3. Stratco unable to secure "Masters Hardware"  (Woolworths Hardware) supply aggreement and NZ firm looking like head contender?
  4. Stramit to keep close relationship with BlueScope (One Steel) to keep options open - though nothing in the pipeline for them.
  5. Metroll is just pricing, importing and making the most of the other major rollformers lack of confidence in the market place - keep an eye on them!
  6. The big layoffs this week have been Lysaght in Queensland (very big) followed closely by Fielders (lastmonth) in South Australia - they are both to concerned about sales drop to worry about competition. 
  7. News next week on MAJOR ROLLFORMER development (keep posted)!
The highlighting factor shown up by this debt crisis in Europe and the USA has been the large corporate structures are too greedy and expensive - CEO's , GM's, CFO's, GM's etc etc etc - and then you include all the National marketing, operations, purchasing, products, R&D, Sales, Training etc etc - the list is endless. There are going to be very large cuts to the corporate fatcats after this is over - The OVER part means after implementation of the CO2 Tax that won't break the industry - but will be the final straw that killed the camel's back.

Remember in an old post - "This Tax won't cost any more than a SAUSAGE SANDWICH?"

This was Mr. Conner who said "For around the cost of one sausage sandwich per week, putting a price on pollution will help change the investment and power generation decisions necessary to help put Australia on the path to a lower pollution, clean energy future.''

A Sausage Sandwich
 And The Roofer will check this when the Tax is applied?

Apologies regarding the ADVERTISING - but suddenly this BLOG is earning money where as Telstra kept everything. So far to date earnings are 3 cents. Also prevents shutdown.


  1. Good to see the Lysaght castle is being shaken to the core - have rested on their laurels for too long, using their own brands against the other rollformers. Am interested to see who the big southern rollformer is ?? I wonder what John Easling is thinking about the Fielders situation - after the way Hills ended his involvement, he would be laughing his head off.
    I hope brands like Colorbond and Zincalume dont disappear but your right Roofer this is the rot before the carbon tax has even come in.

    The castle has existed for a long time - as with all icons (Lysaght, Zincalume, Colorbond etc) there is the RISE & FALL - this Empire is close to the brink! JE may well be laughing - but he would is in the same downturn as all rollformers in SA no doubt!

  3. very good thread roofer, will be interesting to see what happens but something has to give.

    I cant see the market returning to where it was pre GFC until 2013 when the mining boom will have set in but im sure it will pick up in the summer months and thats when it will seperate the boys from the men as there will be a more consistent flow of work out there and thus making it easier to gauge which rollformers are performing and which arent as at the moment i think it is genuinely quiet across all sectors which is bound to happen in the winter months.

  4. Tinman - you are right - it will improve - but the big item at the moment is the proposed merger with One Steel and BlueScope - I suspect Mr. Plummer will become the new head of the merged group BLUESTEEL or ONESCOPE STEEL maybe! But it will change the way rollformers are operating and importing rollformers will have the advantage - Goodbye Lysaght as market leader.

  5. With Qantas announcing 1000 jobs to go - is this the beginning of a mass exodus of jobs overseas?
    I wonder if the ACCC could/would block a merger between Onesteel and BlueScope?
    Tinman very lean in the roofing industry at the moment and there are some desperate manufacturers out there - the low margins are evidence of this.
    Can the ColorBond brand survive or will we all be supplying "slate grey" instead of "woodland grey" like stratco to survive?

  6. roofer, whilst i think bluescope have brought this on all themselves and agree that importers would have the upper hand if the merger went ahead im not sure if the consumer would be better off. Owning a home is a aussie dream and having a colorbond roof is apart of that dream. Now our kids and grandchildren will be dreaming off indian, chinese and new zealand steel.

    One thing the market needs to be is transparent and at the moment there are some rollformers up to so naughty tricks. However, bluescope dont have the courage to stand up to them

  7. The icons of Zincalume and Colorbond may survive - but where they are manufactured is another story! I think the Stratco is not alone in importing - a few of the others are including Stramit are doing so to compete in the market - which highlights your coment TINMAN - "BlueScope don't have the courage to stand up to them" - maybe - but they are so engrossed in the ASX fall, mergers propositons, and then the rollformers (never have had loyalty) importing. Also BlueSCope has been fairly heavy handed in the past as regard to rebates and discounts - so some won't forget this. Interesting times ahead.

  8. There is a large discrepency between what Stramit and Stratco import. Stramit have an agreement with BlueScope where as Statco ??? Fielders would import similar quantaties to Stramit. Metroll and Stracto would be the biggest importing fish in the sea.

  9. If you did a count on the BlueScope Logos on various websites owned by the rollformers you will find a decrease in it's use. To use your fish analogy - there will be many more jumping off the sinking ship and that includes Stramit!

    Anonymous - could you use a made up name so we can refer to your posts please... The Roofer