BlueScope sees improved result, optimism from local industry

After Bluescope Steel’s improved profit result yesterday, the company’s boss expressed cautious optimism about the environment for Australian manufacturers

After Bluescope
Steel’s improved profit result yesterday, the company’s boss has expressed cautious
optimism about the environment for Australian manufacturers.

As reported by Manufacturers’ Monthly and others, the country’s biggest steelmaker posted a
net profit after tax of $92.7 million for the first half of the financial year.
This was an $89 million improvement on the corresponding period a year earlier.

Paul O’Malley,
the company’s chief executive, said there were signs of “embryonic”
improvements for Australian manufacturing, citing the dollar, which was back
under US 78 cents early this morning.

“Of course it’s on the margin but some of our
smaller customers that maintained optionality of manufacturing in Australia, or
manufacturing offshore, are making marginal decisions now to bring some of that
manufacturing back onshore,” he told The Australian.

“We are starting to see small customers, simple
things like ­window frame manufacturers, door manufacturers, who are starting
to say, ‘I can do it now more cost effectively in Australia than doing it overseas’.”

He said the trend would likely pick up if the
Australian dollar remained in the US 70-cent range for the next three or four
years.

BlueScope’s Australian and North American steel
businesses were the best performing of its five segments.

The Australian steel business had seen a
significant turnaround, following a restructuring and the closure of its Port
Kembla No. 6 blast furnace three-and-a-half years ago. About 1,000 jobs were shed at the time.

O’Malley also said there appeared to be an
adjustment to a post-mining boom economy, and some jobs returning to the industry from overseas.

“After a
very strong trend toward offshoring [in manufacturing], we are starting to see
some domestic onshoring for the first time in almost six years,” Fairfax reports him as saying.

The steelmaker also paid a dividend for the first
time in four years, 3 cents fully franked per share.

Image: Alan Pryke