Tim Boreham | The Australian | March 11, 2011 12:00AM
BLUESCOPE Steel has moved to create a trans-Tasman super division to strengthen its hand in a climate of soft steel prices and unrelenting import competition.
As part of the revamp, current North American head Mark Vassella returns to Australia to head up the powerful new arm, which combines the local manufacturing, distribution and coated products (Colorbond) operations.
The reshuffle also sees the retirement of Noel Cornish, the 42-year BlueScope veteran who currently heads the manufacturing business covering the mainstay Port Kembla operations.
BlueScope chief executive Paul O'Malley said the reshuffle was a "direct response" to the "macroeconomic factors" at play.
"Externally, the priority focus is to compete against imported steel and fast-track the growth of our business in key sectors such as building and construction," Mr O'Malley said.
BlueScope shares have been wildly out of favour since the biggest domestic steelmaker unveiled a $55 million loss for the December half on February 21. The company has been hammered by the strong dollar, which affects interest margins, and the surging cost of iron ore and coking coal inputs, which are not reflected in the final product.
"Import competition has been killing them," one analyst said.
As with local rival OneSteel, BlueScope faces an earnings hit if the government's proposed carbon pricing becomes law.
Last week, BlueScope said it would incur a $300-400m annual tax bill from a carbon price regime, on a "worst-case scenario" based on a $25-a-tonne carbon price and no free permits or other government assistance.
Mr Vassella, who is in his 40s, came to BlueScope via its 2007 acquisition of Smorgon Steel's distribution business. But like Mr Cornish, he started his career at the now-defunct Newcastle steelworks, then run by BlueScope predecessor BHP Steel.
Mr Cornish has not severed his BlueScope involvement altogether: he has been appointed a director of US joint venture North Star BlueScope and will advise the company on its carbon policy response.
BlueScope shares shed 7.5c (3.8 per cent) yesterday to $1.865, their lowest level since October, as investors fled cyclical stocks.
OneSteel shares declined 11c (4.3 per cent) to $2.42.