Australian steelmaker, Bluescope Steel, has announced that it will invest almost $1 billion in its Ohio, US steel mill, North Star.
Bluescope will expand its US production facilities by 40 per cent, and hopes that the expansion will be completed by 2023.
One of the drivers of the expansion into the North American market is the cheaper cost of energy in the US, when compared to Australia, a situation which Bluescope CEO Mark Vassella lamented as a “tragedy” for Australian manufacturing.
Announced as part of the company’s summary of its 2019 financial year activities, the investment follows from the company’s net profit of just over $1b.
While the company restructured its Port Kembla steelworks in 2015, the future for Bluescope is focused on long term, profitable growth, and North Star’s extension is part of that vision, according to Cassella.
“This project fits our strategy perfectly. It offers long-term sustainable earnings growth from a high-quality asset,” he said.
In the announcement, Bluescope also updated investors and the public on its corporate projects, including a new, five-year, health, safety and environment strategy, as well as increasing disclosures on its climate change strategy.
Bluescope also indicated that work had been done on its Supplier Code of Conduct, a diversity and inclusion initiatives, with 40 per cent of new recruits to operator roles now being women.
With energy such a big factor in the company’s growth in the US, chief executive of Ai Group, Innes Willox, noted how energy policy is an area where Australian governments could support local manufacturing.
“While the result is a testament to strong management, it should also serve as a wake-up call that without addressing our policy challenges, Australia runs the risk of failing to take advantage of the real strengths that underpin our economy,” said Willox.