BlueScope is to acquire the downstream long-products rolling and marketing operations of Fletcher Building’s Pacific Steel Group (PSG), based in Auckland, New Zealand.
PSG is a producer and marketer of long products such as reinforcing steel, rod and wire, and sold approximately 240kt to New Zealand domestic and export customers in FY2013. BlueScope will be acquiring the rolling mill and wire drawing facilities located at Otahuhu in Auckland as well as the rolling mill in Fiji, currently operated by PSG. The acquisition price is approx. USD 50M plus working capital. Half of the acquisition price will be paid upfront and the other half in the second half of CY2015. The cost of acquiring working capital is expected to be funded through realisation of working capital savings with no significant timing difference.
BlueScope’s wholly owned subsidiary, New Zealand Steel, will invest approximately USD 41.5M in the construction of a billet caster and associated plant at the Glenbrook steelworks, and on integration costs. The new caster will supply steel billet as feed to the rolling mills in NZ and Fiji. The construction works will create approximately 70 new construction jobs over the next two years, prior to commissioning during the second half of CY2015.
