BlueScope Steel Ltd. (BSL), Australia’s largest steelmaker, will cut production and jobs at its Western Port facility to lower costs amid weaker demand for steel.
BlueScope will cut jobs at the steel plant by almost a fifth, or about 110 employees and 60 contractors, Michael Reay, a spokesman for the Melbourne-based company, said by telephone today. The Western Port plant, located near Hastings about 80 kilometers (50 miles) southeast of Melbourne, produces cold rolling, metal coated and painted steel products used in construction, he said.
BlueScope has stopped most exports from Australia, shut a mill and a furnace and shed about 1,000 jobs in the past two years as domestic steelmaking companies battle a stronger Australian dollar, higher costs and lower steel prices. The company sold half of its coated-steel operations in Southeast Asia and North America to Nippon Steel Corp. (5401) in August.
“This change will reduce production levels and provide significant cost savings,” BlueScope said in today’s statement, without specifying the size of the output cut. “We will keep all currently operating lines and assets open at Western Port, to provide flexibility and allow for additional throughput when demand improves.”
BlueScope expects the changes will cost the company about A$17 million ($17.9 million), which it will be able to recover within a year through improvements in operating costs, it said in the statement. BlueScope will continue to produce the same portfolio of products and retain the capability to meet current and future demand, it said.
The stock fell 0.3 percent to A$3.70 when it last traded in Sydney on Jan. 11.
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