EoW March 2011

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Transat lant ic Cable
EuroWire – January 2006 32 Euro ire – March 2011
Steel
Evraz North America seeks to improve its
sales by changing the view from the
executive suite
Will moving its headquarters fromPortland to Chicago enable the
Russian parent of Oregon Steel Mills to boost business in Oregon?
Evraz Inc, NA, the $3 billion North American unit of Russian steel
giant Evraz, thinks so, and in January announced the corporate
move. Manufacturing will remain in Portland, the northwestern
city in which Oregon Steel Mills was established in 1928, adding
jobs if Evraz succeeds in improving sales from its transplanted
home base.
The move was not welcome news in Oregon, which has seen an
exodus of US and Canadian corporate operations as the result of
acquisitions or business changes. Richard Read, of the Oregonian,
noted that with each departure, the state loses“executive salaries,
commercial prestige, local decision-making, and informed
support of community causes.”
But Evraz NA chief executive Mike Rehwinkel told the Portland-
based daily that Oregon could in fact profit from the Russian-
ownedcompany’smovetoacentrallylocatedcitywheremanagers
can seek more business for underused Portland plants. He said:
“It’s about growing jobs in Portland for Evraz, which means we
need to be in Chicago to do that.” (“Parent Company of Oregon
Steel Mills Moving Headquarters to Chicago,” 20 th January).
While the decision was said to be prompted by time-and-space
considerations – it is easier, the Evraz executive noted, to fly from
Chicago than from Portland to customers in Calgary, Houston,
Dallas, Montreal, and Philadelphia – the move has in fact been in
the cards. It advances the company’s effort to integrate the North
American steel conglomerate created when Moscow-based Evraz
bought Oregon Steel in 2007 and, in 2008, Delaware’s Claymont
Steel and Canada’s Ipsco. With the $2.35 billion Oregon Steel
purchase, the Russian company also acquired Rocky Mountain
Steel Mills, which made Evraz the largest rail supplier in North
America. The recession in the US put a crimp in the company’s
plans but did not curb its ambitions. Evraz NA regained sales in
2010 and aims to exceed its $3 billion in revenues this year. As
Mr Rehwinkel told the Oregonian: “We want to be a $4 billion
company going to $5 billion.”
A major US city offers a host of obvious advantages for a ❈ ❈
global company. But it should be noted that Evraz’s opening
of its Chicago headquarters, slated for June, represents less
a windfall for the Windy City than the calculated outcome of
a campaign by Chicago’s mayor Richard Daley. A year ago,
Oregon passed ballot measures 66 and 67, raising taxes on
corporations and high-income earners. Mr Daley said at the
time that he would be recruiting Oregon companies. As noted
by the Oregonian, the state of Illinois backed up the Daley
initiative, laying on $3 million in incentives to sweeten the
deal for Evraz, including tax credits spread over 10 years and a
one-time training grant of $50,000.“Illinois competed against
offers from Colorado and Delaware, where the company
also has mills,” wrote Mr Read. “Evraz is expected to invest
$9.7 million in Chicago over ten years.”
While Illinois legislators recently raised the state’s business
income tax rate, Mr Read noted that it is still lower than
Oregon’s. An educated guess would be that Illinois will be
sure to maintain that differential.
Notes on scrap . . .
To forestall any shortageof steel scrap resulting from increased ❈ ❈
demand from China and India, the TSB Metal Recycling
subsidiary of Timken Co (Canton, Ohio) is buying a scrapmetal
business in nearby Akron. With the acquisition of City Scrap
and Salvage, announced 31st December, Timken will gain the
scrap dealer’s property, equipment, and relationships with its
own scrap providers. Much of the scrap material generated
by Timken plants around the country will now be processed
at the Akron facility. Timken – a manufacturer of bearings,
alloy steels and related components and assemblies – gets
nearly all of its steel supply from recycled metal. As reported
by Robert Wang of the Canton Repository, the company says
that in 2010 it turned 1.5 million tons of scrap metal into steel
bar and tube. A company source told the newspaper that
City Scrap and Salvage, whose revenue for 2010 was about
$17 million, has supplied scrap steel to Timken for 15 years.
Over the last several months of 2010, almost 23,000 New ❈ ❈
Yorkers contacted the Department of Sanitation to arrange
for the pick-up of unwanted refrigerators, air-conditioners
and freezers. In more than 11,000 instances, the appliances
disappeared before sanitation workers arrived to take
them away. Although scavengers are a familiar presence in
New York, the scale of the thefts – of large items that become
city property upon deposit kerbside – suggests to sources
in city government and the recycling industry an organised
enterprise.
As reported in theNewYorkTimes by criminal justice journalist
William K Rashbaum (14th December), “the big loser” appears
to be a multinational recycling conglomerate, a subsidiary
of which has a large city contract to recycle the hundreds of
thousands of tons of salvageable material generated each
year by New Yorkers, including such bulk-metal items as
appliances.
The subsidiary, Sims Municipal Recycling of New York LLC,
estimates that the thefts, along with schemes involving
redeemable bottles, are costing the company $2m-$4m a
year. Behind those losses, wrote Mr Rashbaum: “Some in the
industry – by some accounts an $85 billion annual business in
2008 – see the hand of organised crime, although no one can
point to hard evidence.”
Telecom
Android overtakes Symbian as the world’s
best-selling smartphone platform
According to a study released on 31st January, in the last quarter
of 2010 the Android mobile operating system from Google Inc,
of the US, overtook Symbian, from Finland’s Nokia Corp, as the
world’s most widely used smartphone operating system.