"Management Consultants to the Steel, Aluminum, Metals, related Raw Materials, and End-Using Industries"

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Metal Strategies Inc.

COMPANY PROFILE SUMMARY

Metal Strategies (“MSI”) is an international management consulting and advisory firm specializing in commercial and competitive advisory services to participants in the world steel, aluminum and specialty metals industries.  MSI, its principals, employees and affiliates emphasize detailed research and advisory capabilities, and a high level of customer service.

MSI is uniquely positioned with its high-level, in-house experienced staff in the areas of steel and metals consulting:

Detailed commercial and market evaluation capabilities
Benchmarking and plant/company competitive analysis, including cost models
Labor and benefits evaluation including ability to negotiate labor contracts
Raw materials and shipping logistics
Engineering plant design, equipment selection, installation cost and timing
Technical/IT systems
Turnaround consulting and interim management services

The services of MSI include fluid access to affiliated specialists, market and plant cost curve services, topical multi-client studies, and a wide variety of specialized consulting services ranging from international steel market research, technical analysis and plant cost benchmarking, to plant feasibility studies, turnaround management and merger and acquisition analysis.

MSI operates with the following key infrastructure features:

·         Experienced professional staff

·         Extensive worldwide industry steel plant and company operational and financial databases

·         In-house access to an unmatched library of statistical data, forecast services, industry journals and publications from around the world.  The statistical and publications budget for MSI’s headquarter library unit is over $50,000 per year.

·         Detailed and up-to-date competitive intelligence files on over 3,000 steel and related companies, raw material companies, non-ferrous metals companies, foundries, service centers, processors, hundreds of non-ferrous companies, and equipment manufacturers worldwide, in both hard copy and on-line formats.  These files have been maintained and updated on a consistent basis for over 20 years.

·         State-of-the-art international plant cost-of-production models covering integrated mills through the cold rolling and coating stages, mini-mills, specialty and stainless mills, DRI and related facilities

·         Comprehensive econometric steel and raw material market supply/demand models.

The engineering and technology units of Metal Strategies bring a wealth of high-level management experience – from mini-mills through integrated production plants – to customer assignments.

MST staff experience includes hands-on production, commercial, operational and strategic management assignments with major domestic and international steel and specialty metals producers.

With combination of operations and consulting experience, MST has skills and insight that can be applied for clients in a wide spectrum of metals and metalworking operations.

Close ties with commercial and production management at metals companies, mill builders and the engineering community, coupled with continuous research of various aspects of the  industry, give MST insight into the latest industry technology and advances.

MST professional’s industrial experience and knowledge base include engineering and operation of blast furnaces, basic oxygen and electric arc furnaces, ladle furnaces, AODs, VIM/VAR/ESRs, continuous casters, reheat furnaces, hot and cold rolling mills, processing and finishing lines.

Metal Strategies Inc. is a leading international metals research and management consulting firm, entering its sixth full year of operations with primary offices in Philadelphia , Pittsburgh , and Bath , UK and affiliate offices in Stockholm , Sweden and Perth , Australia .

Each of the 15 principal/partners of MSI has up to 20 or more years of direct professional industry experience in the steel and metals industries, many at the Director or Senior Vice President level in areas such as Commercial, Strategic Planning, Engineering & Technology, Financial, and Labor Management, among others, for companies including the following:

·         Chase Manhattan Bank

·         CRU-International

·         Beddows & Co.

·         AK Steel/Armco Steel

·         Krupp Engineering / D&L Engineering

·         Ipsco Steel

·         Cleveland Cliffs

·         Amax / Alumax

·         J&L Steel

·         Axel Johnson/Avesta

·         Washington Steel/Lukens

·         Special Metals

 

MSI is uniquely positioned to assist companies involved in all aspects of the metals industry:

·         MSI has a strong industry reputation in the steel and specialty metals industries, the financial community and government agencies and leaders.

·         MSI, unlike most of its competitors, has the internal staffing of company principals and affiliates – all with high levels of experience -- to handle the full gamut of issues required to be examined in almost all types of consulting projects, from commercial, labor, financial, technical and engineering, through to purchasing, and government relations.

·         MSI and its key personnel regularly work on behalf some of the most influential companies in the industry including Nucor, Worthington , Delta Steel (NS-BHP), The Techs, North Star Steel, Commercial Metals, BHP Steel, CSN, Hylsa, CVRD, Cleveland Cliffs, Sumitomo, and many other U.S. , NAFTA and international steel and related companies.

·         MSI is currently the primary steel industry advisor for the following key federal government agencies, and as such, we have been directly involved in some of the largest and most important decisions facing the U.S. steel industry in recent years as well as having first-hand, boardroom-level knowledge of the options and decisions faced by some of the most financially stressed companies in the industry including LTV, National, Bethlehem, Geneva, Acme, Republic Technologies, Northwestern Steel & Wire, CSC Ltd. and many others:

o        Pension Benefit Guaranty Corp. (PBGC)

o        Emergency Steel Loan Guarantee Board

o        Central Intelligence Agency

o        Department of Justice – Legal and Anti-Trust

o        Executive Office of the President – Trade Representatives Offices

o        US-International Trade Commission

·         Over 25% of our consulting work is conducted on behalf of major financial institutions such as J.P. Morgan, Solomon Smith Barney, Scotia Capital, Royal Bank of Canada and many others, and our company’s Director was formerly Vice President and Director of the World Steel and Metals Practice for Chase Manhattan Bank, at the time, the holder of the largest steel and metals portfolio of any bank in the world.

·         MSI has extensive experience in dealing with financially and operationally distressed companies, and has worked with such companies on labor negotiations, plant reconfiguration strategies including EAF conversion, slab sourcing, domestic and international partnering, financial negotiations, etc. One of our directors has more than 25 years of senior management operating experience managing turnarounds of specialty metals and metalworking companies.

·         MSI operates with low overhead, is a privately-held partnership not beholden to stockholders or outside owners, and the salary and benefits of its senior personnel and principals are 100% variable.

 

DATABASES and BENCHMARKING

Plant Cost Models:

MSI uses among the most detailed plant cost models in the industry (we have attached several indicative models by process stage, converted into Excel format, to provide you with a better sense of our capabilities in these areas).  Our models cover all major carbon flat rolled plants in the U.S. and numerous international plants.  As a secondary cross-check, we periodically supplement our own more detailed models with cost estimates of industry consultants.

Steel Plant Capacity Data Bases:

MSI maintains detailed electronic and hardcopy databases of essentially every steel plant in the world including extensive data on mill configurations by process stage, line speeds, horse power, gauge and width ranges, installation and upgrade dates, quality ratings, etc.

Steel Industry Supply, Demand (Product and Market) Data and Models:

MSI maintains detailed databases down to the end-market and micro-product levels for the U.S. and all major countries and regions worldwide.  Our databases in these areas go back a minimum of 20 to 30 years.  We subscribe to all major steel statistical sources (AISI, IISI (Brussels) , IISB (London), United Nations/ECE, OECD, Cancero (Mexico), Statistics Canada, Inst. Brasiliero de Sider., Ilafa, Eurostat, Statistics Bundesamt, Chambre Syndicate, Ministry of Industry (Russia), Japan Steel Federation, Korea I&S Assoc., Steel Scenario (India), Southeast Asia I&S Inst., Ministry of Metallurgical Industry (China), BHP (Australia), Iscor (S. Africa), Middle East I&S Inst.  We also supplement these first-level sources with those of other secondary vendors such as World Steel Dynamics, J. King Associates ( London ) and others.

Steel and Raw Material Price Data:

MSI uses and maintains extensive U.S. and international pricing data from various sources including Purchasing Magazine, American Metal Market, Brook Hunt (London), ISSB (London), Metal Bulletin, Customs Bureau, and from our own surveys and consulting work.

Steel Company Financial Databases:

MSI maintains a comprehensive library of quarterly, annual and 10K reports for nearly 500 U.S. and international companies in the steel, service center, end-market raw materials, and other related sectors going back, in some cases, over 30 years.  Much of this data is in our comprehensive World Steel Company Financial and Operational Database covering over 200 U.S. and world steel and related companies over 10 to 20 years through the current date and from between 50 and 250 line item categories (sample in Excel form attached) from production, operating rates, labor cost and productivity, sales, and profits, to other income statement, balance sheet and cash flow items.

Labor Cost Databases:

MSI’s labor cost data and related analytical tools are derived from various sources including AIS-1 labor and financial detail reports, our company financial data bases (see earlier item  above), the Bureau of Labor Statistics, and our own research and private consulting work.  MSI has extensive and recent working knowledge of details (although company specifics are confidential,) relating to such issues as the last standing USWA offer to LTV, new labor issues with ISG, Wheeling Pittsburgh, Gevena Steel, Republic Technologies, Duferco Farrell, DSC (former McLouth, CSC, and many others.

DATABASES and BENCHMARKING  

Economic and End-Market Databases:

MSI subscribes to several U.S. and international economic databases of Standard & Poors’ DRI/WEFA (C. Plummer was formerly a Sr. VP of the WEFA Group), economy.com (a 100-employee, 1990-off-shoot of the WEFA Group), Blue Chip Forecasts, Economist Intelligence Service, and numerous other sources.  In addition, MSI subscribes to several dozen end-market statistical sources including: Wards Automotive, Wards International, Assoc. of Home Appliance Mfgrs., Can Mfgrs. Assoc., NCCA, MBMA, W.F. Dodge, Preston Pipe Reports, Pipe Logix, MSCI, STINA, Work Boat, Railway Association and numerous other end-market sources.

 

General Research Library and Related Files:

MSI subscribes to over 75 trade journals and statistical sources from around the world.  MSI supports and maintains one of the largest and most comprehensive steel research libraries in the world., giving us one of our strongest competitive advantages   Including our financial data mentioned earlier, we have files on virtually every steel company, raw material company, steel product and production process, steel end-market, and steel-related labor-, energy-, and other- issue, in the world.


CONSULTING SERVICES

 

Metal Markets and Corporate Strategies

·         Business strategy development and evaluation

·         Customized market research and competitive environment assessment

·         Commercial and technical feasibility studies and risk evaluations

·         Full scope due diligence studies

·         Assets Valuation Analysis

·         Operations benchmarking, cost modeling and analysis

·         Corporate mergers and acquisitions analysis and advisory

·         Labor and employment advisory

·         Worldwide steel plant cost, market and financial databases

Technologies and Operations Management

·         Steelmaking and rolling operations, mill facilities and process technologies

·         Evaluation of product mix, process technology and mill facilities for financially sustainable operation

·         Restructuring and re-start of financially troubled steel companies

·         Shutdown and liquidation of unutilized or unprofitable assets

·         Production efficiency optimization for the remaining operating facilities

·         New, modernized or shutdown mill facilities start-up advisory

·         Product quality and productivity improvement

·         Facility and equipment reliability assurance

·         Energy, utilities and raw materials purchasing and consumption management

·         Interim management services

CAPEX Development and Management

·         Development of CAPEX programs, scope definition and technology selection

·         Manufacturing process development and facilities planning

·         Conceptual project analysis and capital investment cost analysis

·         CAPEX project financing consulting

·         Contract negotiations and project execution management

·         Project management, scheduling and cost control advisory

·         Evaluation of project technical and financial performance

Expert Witness Consulting

·         Project post-mortem audit for contract compliance, equipment functionality, process performance guarantees, construction quality and cost-effectiveness

·         Construction dispute and resolution analysis

·         Litigation assistance and expert witness testimony

·         Forensic accounting and insurance dispute resolution


REPRESENTATIVE LIST OF CLIENTS

 

Ferrous Metals Companies

Acroni

Armco (AK Steel)

Axel Johnson/Avesta

Commercial Metals Corp.

Hylsa

Ahmsa

BHP Billiton

Beta Steel

Bayou Steel

Duferco

Essar Steel Ltd.

GS Technologies

Ipsco Steel

Iscor

Ispat Karmet

Ispat Mexicana

J&L Steel

J&L Structural

Lukens ( Bethlehem )

LTV

Metal Tech

North Star Steel

Nucor

NKK

Republic Technologies

Saldanha Bay Steel

Sumitomo

Trico Steel

U.S. Steel

Washington Steel

Weirton Steel

Wheeling Pittsburgh

Wolverine Metals

Worthington Steel

United Steelworkers of America

American Iron & Steel Institute


Government Agencies

Pension Benefit Guaranty Corp (PBGC)

Emergency Steel Loan Guaranty Board

DOJ-Legal

DOJ-Anti Trust Division

Office of the President

International Trade Commission

Central Intelligence Agency

Congressional Research Service


Aluminum Companies

Alcoa

Bonneville Power

Century Aluminum

Commonwealth Metals

Landisvirkjun


Materials & Other

ABB

American Iron Reduction

A.T. Kearney , Australia

Axel Johnson Metals

BHP Billiton

Canadian National Rail

Cargill Corp.

Citizens Gas & Coke

Cleveland Cliffs

C/G Group

CVRD

Hismelt

Industrial Development Corp. of S. Africa

Kobelco

Northern Indiana Public Service (NIPSCO)

North Ltd.

Prax Air

Phelps Dodge

Philips Services

Primary Energy

RTZ, QIT

Samancor

Special Metals

UCAR Carbon

Union Pacific

U.S. Filter


Financial Institutions

Bank Boston

Bankers Trust (Deutsche Bank)

Blackstone Group

Bank of Nova Scotia

BB&T Capital

J.P. Morgan Chase

Credit Swiss First Boston CIBC Deutsche Bank

DLJ Capital

GE Capital

ING Capital

Morgan Stanley

National City Bank

Nations Bank

Oak Hill Advisors

Scotia Capital

Sanwa Bank

Sakura Bank

UBS Warburg



RECENT STEEL CONFERENCE PRESENTATIONS

 

(By Christopher Plummer, except where noted)



McCloskey’ World Coal and Coke Conference

Philadelphia , PA

October 16, 2004

 

World Coal and Coke Summit

BHP-Billiton, Intertech

Chicago , IL

November 11, 2004

 

Metal Bulletin

Annual World Stainless Conference

Prague , Czech Republic

September 21, 2004

 

McClosky’s Coal & Coke Annual Conference

Philadelphia , PA

October 11, 2004

 

Forging Industry Association

Annual Conference

Vancouver , BC , Canada

May 29, 2004

 

Steel Manufacturers’ Assoc.

Annual Steel Co. Executive Meeting

Washington , D.C.

May 24, 2004

 

Executive Committee

Steel Buyers’ Forum

Institute of Supply Mgmnt.

Annual International Purchasing Conference

Philadelphia , PA

April 27, 2004

 

American Metal Market

2004 N. Amer. Stainless Conf.

Pittsburgh , PA ,

April 29, 2004

 

World Galvalume Conference

Keynote Speaker

Seoul , S. Korea

September 28, 2002

 

American Metal Market

2003 N. Amer. Stainless Conf.

Pittsburgh , PA , April 29, 2003

Steel Plate Fabricators Assoc.

Annual Convention

Tucson , AZ

March 18, 2003

 

Metal Service Center Inst.

Annual Convention

Phoenix , AZ

January 16-18, 2003

 

Inst. Scrap Recycling Ind.

Annual Convention

Las Vegas , NE

Mar.12, 2002

Refractories Institute

Annual Industry Conference

Boca Raton , FL

April 17, 2002

 

Intertech

World Coal/Coke Conference

Keynote Presentation

Pittsburgh , PA ,

October 15-17, 2001

 

Forging Industry Association

Annual Conference

Pittsburgh , PA

August 28, 2001

Steel Mfrs Association

Annual Board of Dir. Meeting

Pebble Beach , CA

February 7-8, 2001

American Metal Market

N. Amer. Stainless Conf.

Pittsburgh , PA , April 17, 2001

Ryan’s Notes

Stainless/Ferroalloys Conf.

Orlando , FL

October 29-30, 2001

Steel Service Center Institute

Forecast 2001 Conference Chicago , IL

September 11-12, 2000

Intertech

World Iron Ore /DRI Conf.

Keynote Presentation

Chicago , IL , Oct. 9-13, 2000

American Metal Market

N. Amer. Stainless Conf.

Pittsburgh , PA , April 12, 2000

 

Metal Bulletin

Minimill Conference

Zurich , Switzerland , April 2000

Steel Plate Fabricators Assoc.

Annual Conference

Williamsburg , VA , 4-17-2000

 

Forging Industry Association

Annual Conference

Charlotte , NC , March 20, 2000

Steel Mfrs Association

Annual Board of Dir. Meeting

Washington , D.C. , April 2000

American Metal Market

N. Amer. Stainless Conf.

Pittsburgh , PA , April 7, 1998

Inst. Scrap Recycling Ind.

Annual Convention

San Francisco , CA

March 19, 1998

Metal Bulletin

International Steel Conference

Kuala Lumpur , Malaysia , March 12-13, 1997

American Metal Market

Steel on West Coast Conf.