Business Review
October 10, 2006
Agenda
Introductions Foseco NorAm Steel Overview The North American Market Foseco NorAms Focus Products and Applications Summary Lee Plutshack Mike Fish Bill Jennings Bill Jennings Albert Dainton Lee Plutshack
NorAm Overview
M. Fish October 10, 2006
Saybrook - Ohio
Deltek Carbon bonded ceramics production
Cleveland R&D
Afax recipe development laboratory Foscast refractory development laboratory Turbostop water model laboratory Deltek mould model laboratory mathematical and water modeling
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A History of Innovation
Profax/Kalorex Hot Tops - early 60s - Ingots Garnex Tundish Liners 1970s Afax Granules in North America 1980s Turbostop -1990s Integrated Process Improvement - 2000s
Unique product portfolio linking the variables in the continuous casting process.
Foseco has been introducing new technology to the steel industry for over 40 years
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Chief Executive
VP Sales
VP Marketing
Operations Dir.
Finance/Commercial
Direct Sales
Direct Mktg.
Cell Mgrs.
Service Techs
R&D/Eng Support
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55 steel companies with approximately 135 facilities 9.6% of the world steel production Largest Markets: Construction and Automotive
Other Key Markets Machinery Containers Pipe/energy
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400 Production (Milion Tonnes) 350 300 250 200 150 100 50 0
China Europe NORAM C.I.S. Japan S. Amer India
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NorAm Production
130 120
Million Tonnes
110 100 90 80 70 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05
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35 30 25 Tonnes 20 15 10 5 0 '06 '07 '08 '09 '00 '01 '02 '03 '04 '05
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Consolidation of Industry
LTV Inland Lukens Wierton Bethlehem Sidbec Georgetown Dofasco Arcelor/Mittal
USS
Nucor
Gerdau Ameristeel
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Post Consolidation
Top Three
Nucor 18%
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Impact of Consolidation
Steel Companies are stronger financially
Manage supply with demand Domestic & Global Higher steel prices Less cyclical production and pricing New labour agreements
Centralize Purchasing
Greater purchasing influence Fewer suppliers Price rationalization/down initiatives
Reduced R& D.
Greatly reduced localized R&D capability. More reliant on supply chain - Foseco
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Targeted Sectors
Slab Thin Slab Special Bar Quality (SBQ)
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Financial stability
Strong steel markets Value added steels Premium price steel producers.
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Why we succeed!
Highly trained field sales and marketing team
Customised products
Managing the business at the account level working with the customer
Engineering expertise
Robotic & automatic application systems . Water modeling services for Turbostop & Deltek Global experience and resource base
Technical support
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SALES $
2000
2001
2002
2003
2004
2005
2006
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LADLE
MOLD
TUNDISH
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Product Split
CBC 10%
Other 3%
Tundish 17%
SSM 12%
Afax 40%
Turbostop 18%
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Metallurgica 10%
Others 8%
Foseco 27%
Stollberg 55%
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High risk
Last and most critical consumable in the hot end process
Highly sustainable
Multiple formulations Changing requirements Regular re-engineering of product
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Offer Differentiation
High
Med
Low
Tundish Flux
Low
Med
High
SALES $
1986
1989
1992
1995
1998
2001
2004
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TURBOSTOP SYSTEM
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Vesuvius 20%
CCPI 22%
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High risk
Steelmaking process re-engineered to custom design
Highly sustainable
Multiple formulations Changing requirements Regular re-engineering of product
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Offer Differentiation
Med
High
Generic Shapes
Low
Traditional Methods
Low
Med
High
Turbostop Sales
9 8 7 6 5 4 3 1 0
SALES $
1994
1997
2000
2003
06 Proj.
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Deltek SES
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Japanese 11%
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High risk
Product issues result in high cost to steel plant
Highly sustainable
Multiple formulations Changing requirements Regular re-engineering of product
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Offer Differentiation
High
Low
Med
Deltek Sales
6 5 4 3 2 1 0
2001 2003 2005
SALES $
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Deltek SES
50
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Focus resource on value-added opportunity Compete on technology & service Exploit the synergies of our unique product portfolio Steel profitability will improve
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