Ispat-Sidbec : Entering North America

            



<<Previous Page

The Turnaround Contd...

Meanwhile, Sidbec further restructured the wire-drawing operations by closing a plant in Etobicoke, Ontario and consolidating production at a plant in Montreal. To consolidate the operations and to justify new investment in Montreal, Sidbec asked the union for a new long-term contract.

USWA members agreed to renegotiate to help turn around the wire operations. After tough negotiations, the union finally signed a five-year labor agreement with a reduction in pay and benefits worth 15 %. In return, the company instituted a new profit-sharing plan and agreed to invest C$10 million to consolidate and modernize the plant in Montreal. Within a year, Sidbec spent C$8 million of the C$10 million promised investment. Though the union felt that there were minor problems, it decided to negotiate further, once the company made money.

Business Strategy Case Studies | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

or
Business Strategy Case Studies | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

or
PayPal (7 USD)

At the main iron and steel-making facilities, Sidbec made a total of C$44 million in capital improvements in 1995, including the C$16 million to upgrade and restart the idled DRI module. Once Ispat decided to increase DRI production, upgradation of the basic steelmaking and rolling operations followed.

Before the takeover, Sidbec produced 750,000-800,000 tons/year of DRI at the Module 2 facility, which had a capacity of 900,000 tons/year. By mid-1996, the company expected to produce about 1.5 million tons: 900,000 tons from Module 2 and 600,000 tons from Module 1, which was actually the module’s capacity. With additional DRI available, Sidbec increased the percentage of DRI it used per heat, and it also increased the steelmaking capacity.

"Otherwise, we would have to sell all of the excess DRI on the open market."
- Leboutillier.

In 1995, Sidbec sold DRI in Canada, and in 1996 it shipped a part of its production to Imexsa, Mittal’s Mexican venture.

Sidbec bought its gas from western Canada, where the gas price was about C$1 per mBtu in 1999. Sidbec paid additional transmission charges to get the gas to Montreal. The gas prices though competitive, were much higher than in Trinidad.

In the melt shop, Sidbec went from a three-furnace to a two-furnace operation. When a C$24 million upgradation was completed in 1997, capacity rose from 1.3 million to 1.8 million tpy. Ispat increased transformer capacity from 90 to 130 megavolt amperes, installed copper panels in the furnaces, added a dolomitic-lime-injection system, increased the heat size from 145 to 155 tons by using larger ladles, and upgraded the fume-collection system to keep up with the increased production rate. Sidbec also increased casting speeds by adding intensive spray cooling below the mold and electromagnetic stirring in the mold. Sidbec-Dosco could vary DRI production and usage depending both on its own production requirements in the melt shop and changes in the price and availability of scrap.

Next Page>>

Advertisement...

top