October 07, 2008

OneSteel acquires SS distributor Fagersta Group

OneSteel Limited announced that it has acquired Fagersta Group, which is Australia’s fourth largest stainless steel distributor. The acquisition of 100% of equity in Fagersta will be completed on 3rd September 2007. The Fagersta business will add to the sheet, coil and Aluminum division of OneSteel’s Distribution business.

Fagersta generates sales of around AUD 70 million per annum through its five sites in Brisbane, Sydney, Melbourne, Shepparton and Adelaide. The 43 year old privately owned business has 60 employees.

Mr Geoff Plummer MD & CEO of OneSteel said that “OneSteel will continue to run Fagersta as a separate business using its existing brand sites and management team under Mr Jan Persson CEO of Fagersta.”

He added that “The acquisition of Fagersta is a good strategic fit for OneSteel. Demand for stainless steel products has been growing strongly both globally and domestically and it has exposure to a broader market segment base than carbon steel. When added to OneSteel’s carbon steel and aluminum product capability, OneSteel gains a competitive advantage and differentiated position in the market.”

OneSteel has identified several areas to drive value out of the acquisition including working capital improvements sales and purchasing synergies as a result of combining the management of OneSteel and Fagersta stainless steel purchasing.

The acquisition follows OneSteel’s purchase of Midalia Steel in 2004 through which a small customer targeted brand has prospered through differentiation and focus.”