OneSteel announced on Tuesday plans to change its name to
Arrium Limited in a bid to bring in new investors and clarify the
extent of its business.
The company explained that its old name indicates its line is
limited to steel production when it has expanded the past five
years to include iron export and mining consumables.
Stockholders are scheduled to vote on the new name Arrium at
the May 8 meeting. Chief Executive Geoff Plummer said the name
was made to sound like a mining and materials business.
"The name OneSteel has in fact been an impediment in recent
years in the marketing of the company," Mr Plummer said.
He explained the would-be investors, especially those
overseas, are unaware that the company is actually Australia's
fourth-largest iron ore exporter and the world's biggest
manufacturer of consumable mining ball-bearings used in grinding
OneSteel, however, is not abandoning steel production at its
Whyalla blast furnace as it would be difficult to find buyers at
a period when demand for steel is down and it would cost the firm
money to shutter it. For the first six months of financial year
2011-12, Whyalla lost $75 million from its steelmaking business
based on revenue of $1.26 billion.
In contrast, OneSteel's iron ore export brought in $170.7
million to total earnings before interest and tax (EBIT) of
$161.8 million from revenue of $421 million, while the
consumables business contributed $65 million of EBIT from revenue
of $708 million.
However, Mr Plummer is confident that its steel business could
still make a valuable contribution as a cash generator in the
With the reduction of steel making's contribution, its share
in OneSteel's asset value has decreased to just 47 per cent from
97 per cent in 2007, while that of mining consumable grew to 28
per cent and mining 16 per cent.
OneSteel's largest shareholder, AXA, backed the name change,
although it has reduced its holdings to 5.92 per cent in February
from 7.35 per cent.
However, only the mining and consumables division will use the
name Arrium, while the steel operations will continue to use
The decline of the steel making industry is felt not only by
OneSteel but also its main competitor, BlueScope, due to the
strong Australian currency and stiff competition for Asian