BlueScope Steel's O'Malley Seeks China Acquisitions to Boost Production
By Rebecca Keenan - Aug 17, 2010 5:01 PM GMT+1000
BlueScope Steel Ltd., Australias largest steelmaker, will consider acquisitions in China to boost its manufacturing capacity and tap demand in the worlds biggest consumer of the alloy.
Some of our assets are getting close to full capacity utilization so to continue to take the next step in China we probably have to add manufacturing capability, Paul OMalley, chief executive officer of the Melbourne-based company, said in an interview. Well probably want to do that more to the western region of China, where growth is now moving from the eastern region.
Steel consumption in China, which last quarter overtook Japan as the worlds second-largest economy, is expected to double by 2020 from 2008 levels, Rio Tinto Group forecasts. BlueScope, which has eight plants and 32 sales offices in the Asian nation, has increased earnings there three-fold since 2003.
They will be smaller scale investments, they will be add- ons, OMalley said yesterday. We want to make sure we take a very conservative approach to growth, but we do see real opportunity.
BlueScope, which yesterday reported a swing to second-half profit, declined 2.5 percent to A$2.33 at the 4:10 p.m. Sydney time close on the Australian stock exchange. There are 11 buy ratings, two hold ratings and two sell ratings on the stock, according to Bloomberg data.
BlueScope, which already has metal coating and painting facilities in China, may consider buying assets with downstream manufacturing capacity, OMalley said. It may also consider acquisitions or expansions in other parts of the world, he said.
To contact the reporter on this story: Rebecca Keenan in Melbourne at [email protected]
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