Review of Operations
NatSteel Holdings
In the year under review, the sales volume from the Singapore operations went up by 6% as against last year with a market share of about 58%. The down stream facility sold 20% more as compared to last year. It is one of the largest single cut and bend facilities in the world. The Xiamen operations in China, a 100% subsidiary of NatSteel, reported a higher sales volume of about 17% over that of last year’s volume.
The Vietnam operations are making structural modifications required to reduce their vulnerability to volatile prices. A distribution network is also being built in northern and central Vietnam.
In Australia, NatSteel runs a network of service centres across all the states through two entities namely NatSteel Australia and Best Bar. In the year under review, the two entities reported a 12% higher sales volume (1,88,000 t) as against last year in the form of straight length rebars, mesh, cut & bend and other accessories.
Continuous Improvement
NatSteel continued its focussed approach towards reducing cost, improving productivity and enhancing quality. In order to strengthen the business fundamentals by matching price and cost cycles and reducing the exposure of the business to frequent fluctuations in raw materials or finished product prices, the Singapore operations reduced the long-term sales contract from 12-18 months to 3 months.
During the year, the Singapore operations focussed on yield improvement, reduction in power consumption and improvement in downstream tonnages with an estimated bottom line benefit of S$14 million. The electric arc furnace shop achieved power consumption of 282 KWhr/tonne (last year 292 KWhr/tonne) and the rolling mill achieved power consumption of 79 KWHr/tonne. The implementation of the SAP project is on schedule and is expected to go live in the second quarter of 2009.
The Xiamen operations have also engaged in efforts to align the price-cost cycle to make themselves less vulnerable to price fluctuations. To this extent, the short-term supply of billets from the Tata Steel operations has also helped. In Vietnam, the establishment of a distribution network in the northern and central regions has been undertaken.
Safety
NatSteel Singapore embarked on the two-year DuPont Safety journey in FY 09. During the year, the Singapore operations made significant progress on safety with help from the DuPont consultants and have brought down the LTIF from over 10 to less than 6. The various initiatives include continuous communication and emphasis from senior management, safety training, formation of Apex council for review, formation of risk containment groups to identify and contain high risk activities and STOP teams to observe safety behaviour and interact with employees on safety. The other subsidiaries will gradually be aligned to the DuPont safety management system.
