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Investors’ Visit to ASEAN Sites – May 2015Pack 4: NS BlueScope Malaysia, Singapore and Brunei
May 2015
Pongsak Padungkarn, President – Malaysia, Singapore & BruneiNathan Antonucci, VP Commercial – Malaysia, Singapore & Brunei
BlueScope Steel Limited. ASX Code: BSL
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Important NoticeTHIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION ORRECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEELLIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATEFINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED INTHIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEELDOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOTTAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULARNEEDS OF ANY PARTICULAR INVESTOR.
THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BE IDENTIFIEDBY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”,“INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THE NEGATIVE THEREOFOR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN ANDUNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUAL RESULTS,PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TO BE MATERIALLY DIFFERENT FROM ANYFUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS, OR INDUSTRY RESULTS, EXPRESSED ORIMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIRRESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FOR ANYINFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION,AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSS HOWSOEVERARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINED IN OR OMITTEDFROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS.
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INTRODUCTION
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We strive for zero harm
0.00.00.00.5
0.00.00.00.00.00.0
FY15 YTD
FY14FY13FY12FY11FY10FY09FY08FY07FY06
Lost Time Injury Frequency Rate Medically Treated Injury Frequency Rate
1.71.41.92.1
0.5
2.4
1.51.4
2.12.2
FY15 YTD
FY14FY13FY12FY11FY10FY09FY08FY07FY06
Safety• Most business units 10-20 years Lost Time Injury free
Environment• Full compliance with local law and regulations• All sites maintain Environment Management System
(ISO14000) certification
BlueScope group average 1H FY15: 0.5
BlueScope group average 1H FY15: 4.6
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NS BlueScope in Malaysia, Singapore and Brunei
• NS BlueScope Malaysia coating and painting facility in Kapar
• Six Lysaght sites: four in Malaysia, one in Singapore and one in Brunei
• First operation opened in 1965
• ~500 employees
NS BlueScope LysaghtMetallic coating and painting facility
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Channels to market
Coated Steel Manufacturer
Imports
Retail
End-User Segments
Channels InfluencersCustomer Segments
Large, medium and small
roll-formers
Pre-Engineered Buildings
Generalfabricators
Generalcontractors
EPC1
Arch
itect
s & D
esig
ners
Cons
ulta
nts &
Engi
neer
s
Cont
ract
ors
Lysaght
Roll F
orm
ers
NS BlueScope
Asso
ciatio
n
Home Owners
Key Decision Makers
Proj
ect O
wner
s
Distributors
EPC1
Contractors
Projects
Export
Manufacturing
1. Engineering, Procurement & Construction
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Macroeconomic environment (1/2)GDP growth is forecast to remain strong…
Source: IHS Global Insight, IMA Asia
4.75.65.2
7.4
-1.5
4.8
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
20182017201620152014201320122011201020092008
8.5
19.2
11.9
-2.7
2.4
-5.0
0.0
5.0
10.0
15.0
20.0
201420132012 20172016201520092008 2011
6.3
2010 2018
Real GFCF (investment) growth (% pa)
• While falling oil and gas prices are expected to impact growth, the outlook remains favourable
• GDP per capita remains second highest in ASEAN
• Investment growth is expected to remain strong, if lower than prior highs
• FDI – a key segment for NS BlueScope – is expected to drive a high share of growth
IMA Asia forecastActual IHS Global Insight forecast Average
Real GDP growth (% pa)
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Residential construction work done (% pa)
• Some moderation from recent strong activity, but favourable growth conditions remain
• Significant opportunity to grow share in this segment, independent of overall market growth
• Non-residential construction expected to remain stable at 4-6% CAGR
• Expecting ongoing fixed investment growth via major government projects (e.g. LRT project, SEDIA, SCORE)
Source: IHS Global Insight
19.526.4
14.7
-20.3
11.4
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
20182017201620152014201320122011201020092008
6.1
IHS Global Insight Dec 2013 forecastActual Average
13.517.6
-1.5
25.9
1.6
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
8.4
2017201620152014 2018201320122011201020092008
Note: Non-Residential construction refers to infrastructure, structures and I&C capacity work
Non-residential construction work done (% pa)
Macroeconomic environment (2/2)… with solid, if tempered, construction market growth
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Business vision and strategic focus
Key strategic areas of focus
Major strategic initiatives
Improve product mix
Improve penetration across the market
Increase/Maintain product profitability on Projects and Retail SME segment
Retail channel geographic expansion
Develop retail brand awareness
Develop loyal dealers and channels
Brand and loyalty programs
Increase new channels and dealers in new geographies
Further develop the ZACS family of products
Enhance market position
Geographical coverage in Borneo
Grow Supply & Install
Grow loyal customers
Convert Painted Galvanised
Convert tiles
Refresh and enhance products
Increased market engagement
Refresh the product range
Increase share of Supply & Install projects
Projects Retail Downstream
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Leadership team
Country PresidentPONGSAK PADUNGKARN
Vice PresidentManufacturing
MidstreamNGAN ZE HONG
AdministrationManager
ROWENA YONG
Vice PresidentSales
MidstreamGAN CHING
KOK
PresidentLysaght
MY/BruneiNG SAY TECK
PresidentLysaghtSG/SSC
TARUN SINHA
VicePresident
CommercialNATHAN
ANTONUCCI
Vice PresidentHealth, Safety& EnvironmentJAMES WONG
Vice PresidentHuman
ResourcesJ. KALAI
Vice PresidentMarketing &Ext. Affairs
Vice PresidentSupply Chain & Order Fulfillment
AUDREYLEOW
Role to be filled
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NS BLUESCOPE MALAYSIA
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NS BlueScope Malaysia
• NS BlueScope Malaysia is located in Kapar
– Metal coating line, continuous paint line and new in-Line painting
• Began operations in 1996
• Capacities:– Metal coating line capacity of
~150kt pa– Continuous paint line ~75kt– New in-line painting ~30kt
• 240 employees
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End user segments
ExportManufacturing
RetailProjects
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Key product applications
Walling
Rainwater goodsLouvres
Framing and truss
Ceiling and partition
Roofing
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Leading brands
Painted brands Metallic Coated brandsEnd user segment
Projects
Retail
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PrimaMajuTM
PrimaMajuTM is an economical painted alternative for the industrial and commercial market and consists of a substrate of AZ100 (100g/m2) coating with a finish coat (17μm) and backing coat (5μm)
MUARA RIMBA TANAMERA CENDANA KEKABU AWANA
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Clean Colorbond® and PrimaMaju™ versus Painted Galvanised
Painted Galvanised
Application Developed for exterior building profiles in applications requiring high paint durability, excellent corrosion resistance and superior dirt resistance performance
Developed for economical exterior building profiles in applications requiring corrosion resistance and paint performance compared to Painted Galvanised
Generic prepainted steel for roofing and walling profiles with lower corrosion resistance and paint performance
Substrate- type- coating class- coating thickness
ZINCALUME® (55% Al-Zn)AZ150 (150g/m2\)~0.050 mm (Both surfaces)
55% Al-ZnAZ100 (100g/m2\)~0.030 mm (Both surfaces)
Zinc CoatedZ180 (180g/m2\) or lower~0.030 mm (Both surface)
Paint Custom formulated super polyester with high quality pigment with Thermatech® technology and clean properties to resist staining and discolouration
Custom formulated polyester with organic / inorganic pigment to suit high UV / temperature environment
Generic resin system – minimum color performance against color fading and chalking
WarrantyPerforation by corrosionPaint peel and flakeColor fadingDirt staining
>1km from marine25 years15 years10 years5 years
>1km from marine15 years10 years5 years
N/A
>1km from marine????
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Expanding painted capacity (1/2)
• NS BlueScope Malaysia is currently commissioning its newly installed in-line painting (ILP) capacity
– An extension to the metal coating line that allows continuous production of painted product
– Adds ~30kt of painting capacity
• Designed to support retail volume growth and overall business profitability
– ILP produces retail painted product, freeing capacity on the continuous paint line
– Potential for higher painted mix– Potential for cost-down on painted product
• New ILP technology
• Commercial product expected before end FY2015
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Expanding painted capacity (2/2)
Level 1 and Paint Coater Level 2 and Resin Coater
Below Induction Oven Zone 1, 2 and 3 and ducting
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LYSAGHT
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Lysaght in Malaysia, Singapore and Brunei
• Six Lysaght sites: four in Malaysia, one in Singapore and one in Brunei
• First operation opened in 1965 – 50 years of history
• 270 employees
NS BlueScope Lysaght Malaysia
NS BlueScope Lysaght Singapore
NS BlueScope Lysaght Sarawak
NS BlueScope Lysaght Brunei
NS BlueScope Lysaght Sabah
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Products
LYSAGHT® STANDING SEAM SYSTEM
LYSAGHT KLIP-LOK®OPTIMATM
LYSAGHT® TRIMDEK® OPTIMA™
LYSAGHT SPANDEK® OPTIMA™
LYSAGHT® CRIMP CURVED TRIMDEK® OPTIMATM
LYSAGHT® SMARTRUSS SYSTEM LYSAGHT® BONDEK II
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BUSINESS PERFORMANCE
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Total sales volume
• Volumes have remained robust
– Continuous paint line capacity has been a limiting factor
– In-line painting to address this capacity constraint
• Some moderation in sales volume at Lysaght but trend has begun to reverse
156.6152.2159.1168.6167.9
FY2014FY2010 FY2013FY2011 FY2012
Total sales volume (kt)
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Underlying EBIT
• Consistent EBIT performance and favourable trend, despite being capacity constrained
• Growth initiatives– In-line painting– New products and product
mix
90.186.287.591.183.5
FY2014FY2010 FY2013FY2011 FY2012
Underlying EBIT (MYR M)
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SUMMARY
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Summary
• Strong safety record
• Comprehensive and long-established presence in Malaysia, Singapore and Brunei
• Leading brands and products
• Expanding painted capacity to support retail volume growth and profitability
• Strong and consistent business performance
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Investors’ Visit to ASEAN Sites – May 2015Pack 4: NS BlueScope Malaysia, Singapore and Brunei
May 2015
Pongsak Padungkarn, President – Malaysia, Singapore & BruneiNathan Antonucci, VP Commercial – Malaysia, Singapore & Brunei
BlueScope Steel Limited. ASX Code: BSL
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