Indias Cabinet Committee on Economic Affairs has approved a INR 93 crore restructuring package for MECON Ltd and increased the retirement age for its employees.

According to the plan a INR 22 crore cash infusion has been permitted as equity during 2006-07 that includes payment of wage arrears, implementation of enterprise resource planning and payment for acquisition of office space. The proposal includes cash infusion of another INR 63 crore by way of 5% non cumulative redeemable preference share capital payable in five equal installments commencing from 2010-12 for redemption of the Government guarantee bonds, payment of statutory dues and meeting wage arrears. The package also includes continuance of 50% interest subsidy, conversion of the Government loan into equity, conversion of outstanding interest into equity and also waiver of guarantee fee.

The increase in retirement age would help the company retain around 300 trained and experienced executives and technocrats. They would be playing a key role in execution of the huge order placed on them because of massive modernization plans of the steel plants under the Steel Authority of India.

MECON is a public sector company under the ministry of steel. From 2003-04 the company has been doing well, and last year it also recorded a good profit. MECON earned a profit of INR 16.12 crore last year and had a turnover of INR 253 crore.

Financial express reported that TATA Steel is planning a preferential allotment to parent TATA Sons to raise around INR 40 billion, which will increase TATA Sons holdings in TATA Steel from 26.7% to 31% and that the boards of TATA Steel and TATA Sons are to meet shortly to approve the decision.

As part of its funding plan TATA Steel will subsequently come out with a USD 1.5 billion GDR issue which will see the group holding in TATA Steel decline to about 27% again. As per report purpose of the preferential allotment is to ensure that the TATA Sons holding in TATA Steel remains at current levels.

The preferential allotment is planned for funding the USD 4.1 billion equity portion of the USD 12 billion acquisition value of Corus. It needs to raise at least USD 3.5 billion between TATA Steel and TATA Sons, as most of the non LBO funding is through a UK based special purpose vehicle.

TATA Sons has already begun raising about INR 9 billion by selling around 1% in its IT arm TCS for the proposed preferential allotment.

It is reported that PSL Limited is exploring possibilities of setting up second Greenfield plant outside India during 2007 and is already in talks with a few firms for forming a joint venture for the proposed plant, which will come up either in the US, Mexico, Malaysia or in West Asia.

PSL would make an investment to the tune of USD 50 million to USD 100 million to fund the joint venture project and intends to hold a majority stake in the plant although the structure of the JV is yet to be finalized.

As per reports, PSL may go for more than one overseas JVs. Mr Ashok Punj MD of PSL said If we find a viable proposal from a suitable partner for our projects in the specified countries, we may go for multiple arrangements.

Business Standard has reported that Hyderabad based Lanco group is pulling out of the race for buying the 30% stake in Indonesias coalmine company PT Bumi Resources as it has found the USD 1 billion price to be too high for PT Bumi.

As per report, Lanco group is now considering taking up stakes in other coal mine operators in Indonesia as well as in coalmines in South Africa, Nigeria and Australia.

Lanco Infratech of the Hyderabad based Lanco group had initially expressed interest in acquiring the stake. Others in the race are TATA Power, Reliance Energy and Japans Sumitomo.

Indias largest zinc producer, Hindustan Zinc Ltd announced that it has reduced zinc prices by 8.3% with immediate effect. Zinc will now be priced at INR 159,100 ( USD 3,608) per tonne from INR 173,500 earlier.

It is the second reduction in February. HZL had cut zinc prices by INR 10,500 per tonne or by 5.6% to INR 176,500 on February 2nd 2007.

PSL Ltd has bagged an initial order of INR 240 crore for supply of large diameter pipes for L&T's Bisalpur to Jaipur water pipeline. The order will be completed in about nine months.

The order will be supplied from the company's newly installed pipe mill at Jaipur, which has an initial production capacity of 75,000 tonnes per annum. The Jaipur plant is a Greenfield project using machinery taken from the demobilized Ahmedabad unit.

Mr Ashok Punj MD of PSL Ltd said We agreed with L&T to demobilize the unit to Jaipur and we are in a position to service energy companies such as ONGC, GAIL India, Cairn Energy etc whose projects are likely to materialize in Rajasthan soon.

It is reported that 11 Indian companies are among the 14 firms which have expressed interest for developing three major projects of 1,302MW capacity in Nepal. The power to be generated in these projects 600MW Budhi Gandaki, 402MW Arun III and 300MW upper Karnali would be exported to India, sole buyer of Nepal's Hydro Power.

The list of Indian companies includes Reliance Energy, GMR Energy, Jindal Steel and Power Ltd, Sutlej Jalbidhyut Nigam, Maytas NCC Consortium, JP Associates, Larson and Toubro, Bhilwara Energy, National Hydro Electric Project Corporation, KSK Electricity Finance India Ltd and Athena Consortium.

Netherlandss Brackel Corporation, China's Sino Hydro Corporation and China National Oversees Engineering Corporation are the three other international companies competing for the projects.

A committee formed by Nepals Water Resources Ministry has commenced work to recommend to the government the awarding of licenses for developing the three projects. The committee will judge the proposals on the basis of over 20 parameters that includes among other things financial capability, experience, royalty to Nepal and construction deadline before deciding on awarding the project.

India's petroleum and coal ministries will hold talks to avoid overlapping while exploit coal bed methane and coal blocks in the country and to develop a road map for harmonious operations of coal and CBM in the overlapped area.

The meeting is taking place against the backdrop of complaints made by the players in the field that simultaneous extraction of methane and coal through underground mining was dangerous.

Ministry spokesman said such recovery in a multi seam scenario had not been practiced in India so far but India's Directorate General of Hydrocarbons has told that simultaneous mining of coal and extraction of methane seams were being practiced by several countries.

New Mangalore Port has recorded a 99% YoY growth in handling coal during April to January by handled 0.77 million tonnes of coal, NMPT also handled 0.848 million tonnes of fertilizers up by 57% YoY and 14,804 TEUs of containers up by 74% YoY.

In the first 10 months the port handled 2.484 million tonnes of cargo through the railway as compared with the total annual railway traffic of 1.5 million tonnes during 2005-06.

Sesa Goa has started using the facility at NMPT for export of iron ore from Chitradurga mines to China by loading 49,064 tonnes on MV Aegean Falcon.

NMPT is also planning to load a new consignment of 26,500 tonnes of granulated blast from Kudremukh Iron Ore Company Ltds Kudremukh Iron and Steel Company to Dubai.

Thermax has posted 88.2% YoY increase in net profit for the October to December 2006 quarter. Its net profit is INR 55.5 crore as compared with INR 29.5 crore in October to December 2005. Its profit for April to December 2006 has increased by 45.3% YoY to INR 118.1 crore.

Themaxs sales during the quarter were INR 544 crore as compared with INR 356.6 crore and exports have increased to INR.89.3 crore as against last years INR 86.8 crore in the quarter.

Order booking of the group for the 9 months ended December 31st 2006 increased more than 94 % to INR 3024 crore compared with INR 1559 crore last year.

Chinese National Development and Reform Commission has reported that the Chinas crude steel output is expected reach 460 million tonnes in 2007 up by 18.48% YoY as against 418.78 million tonnes of crude steel in 2006. NDRC expects Chinas consumption of steel products is expected to rise by about 10% YoY in 2007.

The NDRC said that the forecast is based on the estimate that the country's GDP, fixed asset investment and total trade volume will grow by 10%, 20% and 20% respectively in 2007.

However, NDRC warned that Chinas steel sector would still face pressure from rising prices of iron ore and other mineral resources as well as increasing global anti dumping investigations.

Mr John Howard prime minister of Australia has clashed with Australia's most celebrated climate scientist Professor Tim Flannery over the future of the Australia's coal mining industry. The opposition also rejected Prof Flannery's call.

Professor Tim Flannery called for an end to coal exports saying that exporting coal could no longer be considered to be in Australia's national interest. He told "That time has already come and the social license of coal to operate is rapidly being withdrawn globally and no government can protect an industry from that sort of thing occurring. We've seen it with asbestos; we'll see it with coal.

Mr Howard said that Australia must respond to the problem of global warming, but in a practical way that does not unfairly disadvantage the economy. He said "Much as I respect Tim Flannery, I saw him this morning talking about effectively stopping coal exports. You can't do that. That would be devastating to many communities throughout Australia. It would cost thousands of jobs. We are the largest coal exporter in the world."

Mr Howard added that "We also accept if we are to cut carbon emissions that we have to find ways of reducing the carbon that comes out of the burning coal. One way of doing that is to have clean coal technology.

Anglo American Plc announced that it has formed a new South African coal group, Anglo Inyosi Coal, worth ZAR 7 billion and 27 % owned by black investors. The BEE stake, collectively held by Inyosi, will be split between Lithemba Consortium 33%, Pamodzi Coal 33%, WDB Investment Holdings 19% and the local communities 15%.

It will be funded through a 25 million rand equity contribution from Inyosi and a 68 million rand contribution from Anglo Capital South Africa. Anglo will then subscribe for about 6.9 billion rand worth of preference shares in the new firm.

The new company will incorporate selected key coal projects in South Africa as well as the Kriel colliery and have a 4.1 billion tonnes coal resource base with an estimated annual production of 48.5 million tonnes. The assets also include the Elders, Zondagsfontein, New Largo and Heidelberg projects.

Anglo American, which will provide financing for the development of the coal projects, said the formation of the new group was a key component of the growth strategy of its coal business. The new group will have a significant market in South Africa and sizeable exports of 3.5 million tonnes per year.

Mr Philip Baum CEO of Anglo American South Africa Ltd said that "The funding is well within the norms of BEE transactions and not material to the Anglo group's earnings.

The deal is in line with the government's black economic empowerment policy aimed at giving black South Africans, disadvantaged under apartheid, a bigger stake in Africa's economic powerhouse. Under South Africa's Mining Charter, firms must meet a range of requirements to renew their mining licenses, including minimum equity ownership by blacks, higher numbers of blacks in management and improved conditions for mining communities.

Chinese steel makers, under great pressure caused by rising costs due to increasing iron ore price coupled with high seaborne freight rates are beginning to invest in shipbuilding industry with the purpose of reducing freight rates in future. This move also gives them captive consumption for their shipbuilding quality plates.

Anshan Steel, with total capital of CNY 200 million, is now planning to purchase stocks in Qingdao Beihai Shipbuilding Heavy Industry Co Ltd who is one of the large key shipyards under the China Shipbuilding Industry Corporation. An official from QBSHI disclosed that Anshan Steel's CNY 200 million would be totally applied to ship production. The new shipyard will purchase all shipbuilding plate it needs from Anshan Steel if the steel maker can successfully invest in the new shipyard.

Baosteel, Jianlong Steel and Chongqing Steel also invest in shipbuilding enterprises. Shougang Group is proposing to organize its own fleet to carry iron ore.

An official from CISA said that, in order to obtain cheaper shipbuilding plate, shipbuilder had to initiatively seek cooperation with steel makers several years ago; however, steel makers begin investing in shipbuilding industry during recent years so that they can sell products to the shipyards owing to the fierce competition in the market caused by the oversupply. Mr Qi Xiangdong, deputy secretary general of CISA, pointed out that cooperation with downstream users would help to stabilize China's iron & steel industry.

In addition, steel makers want to cut freight rate through investing in shipyards. Shougang takes the lead in reaching an agreement with CVRD to jointly set up their own fleet for ocean shipping, helping to reduce their freight rate by some 50%. Baosteel Group has signed long-term cooperation agreement with China Shipping Company to reduce seaborne freight rate.

(Sourced from Mysteel.net)

Fortescue Metals Group's has commenced the work on its 260 kilometer railway project as a part of its AUD 2 billion Pilbara Iron Ore and Infrastructure Project. The completion of the railway and port and the first ore shipment is scheduled for the end of March 2008.

The project was being developed under two agreements with the State Government. The Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement covering the planning, construction and operation of the railway and port facilities and the Iron Ore (FMG Chichester Pty Ltd) Agreement covered mining aspects of the project.

The Western Australian Government welcomed the commencement of work on the Pilbara's first privately operated open access railway. Ms Alannah MacTiernan planning and infrastructure minister said "The Government has worked with the company to ensure that statutory approvals required for this project to proceed were provided as quickly as possible."

She added that "This project will deliver an open access port facility on the western side of Port Hedland harbor at Anderson Point as well as the rail link to Fortescue's mining operations in the Chichester Ranges. As well as serving Fortescue, these facilities could provide other companies that are developing isolated mineral deposits across the central and eastern Pilbara with access to export markets."

Mr Andrew Forrest CEO of FMG said that this marks an important step for the company. He said "It's been an absolute labor of love. It's taken at least three and a half years and at least AUD 3.5 billion.

China said that developed nations are responsible for greenhouse gases fuelling global warming and urged them to cut emissions thus deflecting questions about whether China will accept limits.

Ms Jiang Yu a spokeswoman for China's foreign ministry said that Beijing was willing to contribute to curbing greenhouses gases from industry, agriculture and vehicles. But Ms Jiang told that wealthy countries bore the blame, and the solution lay in their hands.

Ms Jiang said "It must be pointed out that climate change has been caused by the long term historic emissions of developed countries and their high per capita emissions, Developed countries bear responsibility and they should lead the way in assuming responsibility for emissions cuts.

A UN scientific panel last week reported was almost certainly behind rising average temperatures threatening wrenching climate change. The expert panel gave a best estimate that temperatures would rise by between 1.8 and 4.0 degrees Celsius in the 21st century, bringing deeper droughts, heat waves and a rise in sea levels that could continue for over 1,000 years even if greenhouse gas emissions are capped.

Many environmental advocates have urged widening the UN Kyoto Protocol, which binds 35 industrial nations to cut emissions by 2012 but excludes developing nation emitters, including China and India, from specific targets.

China's Kunming Steel has started operation of its USD 175 million 45:45:10 JV with Vietnam Steel General Co and Lao Cai Minerals Co to develop the Quy Sa iron ore mine and produce iron and steel in Vietnam.

The JV is designed to produce 1.5 million tonnes per year of iron ore, 0.5 million tonnes per year of pig iron and 0.5 million tonnes per year of steel products by the end of 2007.

The mine is scheduled to be developed in two phases. Each is expected to have a mining capacity of 1.5 million tonnes per year for a total investment of USD 60 million. The first phase is expected to be completed by end of2007 and the second by 2010.

The Quy Xa deposit has proven reserves of around 120 million tonnes of iron ore at a grade of at least 40% Fe.

(Sourced from Mysteel.net)

BNamericas reported that Brazil's steel tube industry could report sales of USD 4billion this year.

Mr Siquiera ED of industry association Abitam said that The growth would represent an increase of about 5% to 6% from 2006, sales volume could also expand. However, 2006 sales are expected to tally to less than the USD3.7billion the director forecast in a separate interview last year.

Mr Siquiera said that "I believe we fell a bit short of this goal. Overall, 2006 was not a very good year. The sector did not perform very well. He added that the association is still closing up revenue calculations for last year.

Mr Siquiera said that Gas pipeline projects within Brazil, in addition to an iron ore pipeline for local mining and metals company MMX and works on the CSA mill in Rio de Janeiro state are due to expand demand this year. The need for pipes in projects abroad will also propel usage. The Brazilian federal government's growth acceleration plan, unveiled last month, could also boost demand in sectors such as basic sanitation and civil construction, he explained, while the automobile sector is likely to increase the need for tubes as well.

Abitam was established in 1957 to develop Brazil's metal pipe and accessories business. Association members include tube and metal product producers Atubo, Schulz and Tupy.

Russia based Gazprom has announced that it is forming a 50:50 JV with the Siberian Coal Energy Company to combine their electricity and coal assets and the deal is expected too finalized in the first half of 2007

The two companies in a joint press release said that "Under the document the parties intend to set up a JV on the basis of their available electric power and coal assets. A precise list of assets to be contributed to the joint company, and the procedure of compensation for possible differences in their value, will be defined in the process of preparing the deal."

Mr Dmitry Medvedev board chairman of Gazprom said that "The partners intend to work out a detailed strategy for the new company, aimed at establishing it as one of the leaders of Russia's electric power sector, and putting it in leading positions in the world's energy and coal producing industry."

SUEK is Russia's largest coal miner accounting for some 30% of energy coal deliveries on the domestic market and around 20% of the country's coal exports. It has subsidiaries and offices in 8 Russian regions. SUEK enterprises produced 89.7 million tonnes and sold 85.7 million tonnes of coal in 2006. SUEK's exports in 2005 were 23.7 million tonnes.

Western Canadian Coal Corp announced that it has received the Mine Permit from the British Columbia Ministry of Energy, Mines and Petroleum Resources to allow for production of up to 2 million tonnes per annum of ultra low volatile pulverized coal injection coal at the Brule Mine.

The Company received an Environmental Assessment Certificate for the Brule Mine from the British Columbia Environmental Assessment Office in July 2006 and is initially developing the Brule Mine in a manner similar to its operations at the Dillon Mine, where the reserve is now fully depleted.

The Brule Mine is located adjacent to the Company's Dillon Mine within the Company's Burnt River coal property and is approximately 45 kilometers south by road from the CNR mainline located near Chetwynd BC.

It is reported that emerging Pilbara player Atlas Iron has moved to sever links with Mr Richard Revelins after he was accused of misleading conduct and insider trading involving another resources company. Atlas said that Mr Revelins had resigned as both chairman and non executive director to pursue other business interests.

Atlas has replaced Mr Revelins as chairman with Mr David Nixon who has been involved in several large mining engineering projects, including a AUD 1 billion iron ore contract for BHP Billiton.

Australian Securities and Investments Commission last month began proceedings against Mr Revelins and Mr Bryan Frost, both directors of Melbourne based Mining Projects Group relating to some matter about a uranium deposit on the tiny Pacific coral island of Niue.

Atlas recently released a new resource statement for its Pardoo project, 75 kilometer from Port Hedland. Its proximity to Port Hedland means it can truck iron ore to the port and not have to go cap in hand to BHP to gain rail access. That resource now stands at 10.5 million tonnes at 57.1%Fe.

The world's largest aluminum producer Alcoa Inc. denied a report in the Times of London that the company approached BHP Billiton Ltd's Mr Charles Goodyear to replace Mr Alain Belda as chairman and CEO.

Mr Kevin Lowery a spokesperson of Alcoa Inc said this is a fabricated rumor. We have not contacted him at all. But he declined to comment when asked if Alcoa was seeking a replacement for Mr Belda, 63.

The Times of London, citing unidentified analysts, said Mr Goodyear also may join a private equity company and then make a USD 30 billion bid for Alcoa and that Mr Jac Nasser a fellow BHP director and former CEO of Ford Motor Co. who is now a partner of JPMorgan Chase & Cos One Equity Partners LLC may help Mr Goodyear.

Mr Sam Evans a spokesman of BHP Billiton said BHP Billiton won't comment on rumors and speculation and that he has made no plans for after his retirement.

Mr Goodyear, 49, announced recently that he will retire by the end of this year as CEO BHP Billiton.

Bloomberg has reported that Croatia will invite new bids for its unprofitable steelmaker, Zeljezara Split d d after a Ukrainian investor the government chose for final talks backed out.

Mr Damir Polancec Deputy Prime Minister of Croatia said that the government plans to call another tender for the 89.3% stake in Zeljezara, on sale for HRK 1 (18 US cents), by next week.

Mr Polancec said that the final bidder, Armko Smart Samobor, part of Ukraine's Smart Group, was not able to meet the obligations it agreed to

The buyer of Zeljezara is required to keep the company's employees, provide a five-year business plan and take over HRK 464 million (USD 81.8 million) in debt.

Australias Griffin Group is planning to spend USD 240 million for upgrading and expanding its Collie coal mining operations, which are the mainstay of the privately owned group's diverse business activities.

S&P in a ratings report for a USD 50 million note issue by The Griffin Coal Mining Company Pty Ltd said that Griffin plans to spend USD 240 million over the next three years on the development of the Ewington 1 and 2 coal mines and the refurbishment and expansion of the charring plant and coal drying facilities.

Griffin is also investment in the USD 400 million Bluewaters coal fired power station, which is being funded independently.

Griffin Coal is privately owned by the Stowe family and is one of only two coal mining companies in Western Australia. The company's coal mines are located in the Collie region of Western Australia. Their mining operations are located adjacent to Wesfarmers' Premier Coal business.

Svenskt Staal AB announced that its profit after financials in October to December 2006 quarter rose to SSKR 1.599 billion in 2006 up by 30% YoY from SKR 1.198 billion in Q4 of 2005 boosted by strong deliveries for its niche products. Its sales totaled SKR 8.316 billion up from SKR 7.006 billion in Q4 of 2005.

SSAB said that the demand for the group's core niche products, quenched steels as well as extra and ultra high strength sheet has been strong throughout the year, especially from the customer segments, heavy transport vehicles, mining industry and infrastructure-related industry. SSAB said deliveries of extra and ultra high strength sheet increased by 43% YoY during the quarter as compared with last year. Deliveries of quenched steels have continued to be restricted by available production capacity but rose by 12% YOY.

SSAB said overall continued strong global demand for steel is anticipated in 2007. SSAB said The steel operations' volumes of the core niche products, quenched steels as well as extra and ultra high-strength sheet, are expected to continue to grow in 2007. During 2007 additional capacity for quenched steels will be brought into operation.

World's largest zinc smelter by output, Korea Zinc Co announced that its net profit jumped almost 6 fold in 2006 from a year earlier on higher zinc prices and its net income skyrocketed by 499.2% to KRW 425.2 billion last year from KRW 71 billion won a year ago.

Its sales rose by 56.5% YoY to KRW 2.15 trillion and operating profit surged by 123.3% YoY to KRW 351.5 billion

Korea Zinc produces about 9% of the world's refined zinc.

Australian junior Allegiance Mining announced that it is targeting first nickel in concentrates production in October 2007 from its Avebury mine in Tasmania.

As per report the mine contractor Barminco has already started operations and is stockpiling development stage ore prior to the completion of the processing plant, which has a target of October 1st 2007.

The Avebury mine is scheduled to produce around 8,500 tonne per year of contained nickel in concentrates but Allegiance is hoping to raise this figure to above 10,000 tonne per year via the discovery of new resources.

Platts reported that China's Huludao Zinc Industry has targeted an output of 333,000 million tonnes of zinc and 21,000 million tonnes of refined lead in 2007. It also aims to produce 50,000 million tonnes of copper for the year.

A Huludao Zinc Industry company official said that "That is our official plan for the year. We have actually raised zinc capacity this year with the new lead line, but it will take time to ramp up production on that line, so we still expect to produce around 333,000 million tonnes of zinc overall this year." He added that the lead operation is new, so that will also take time to reach full capacity.

Huludao started production of its new zinc lead project in December 2006. The project, which produces both lead and zinc, has a design capacity to produce 60,000 million tonnes per year of 99.995% zinc and 30,000 million tonnes per year of refined lead. When in full operation, the line will lift the company's total zinc and zinc products capacity to 390,000 million tonnes per year from the current 330,000 million tonnes per year, and will give the company a full 30,000 million tonnes per year lead capacity.

The Cleveland Cuyahoga County Port Authority has announced that it had a bumper year in 2006, with the volume of cargo passing through the port up by 8% YoY from 2005 and the amount of steel it handled increasing nearly 30% YoY.

Mr Steve Pfeiffer vice president of maritime operations for the port authority called 2006 one of the best years in the 39 year history of the port authority. He said the surge in waterborne traffic demonstrates high local demand for commodities such as steel, iron ore and limestone and is representative of whats going on in terms of our regions manufacturing needs.

Cleveland Port officials said more than 14.9 million tons of cargo in 1,053 vessels passed through the Port of Cleveland in 2006 as against 13.8 million tons in 2005 on 1,026 vessels. The port handled 584,071 tons of steel in 2006 up by 29% YoY from 451,743 tons in 2005. Iron ore shipments through the port rose by 17% YoY to 3.4 million tons in 2006 from 2.9 million tons the previous year.

International Coal Group, Inc. has announced its Q4 results for the 2006. Its revenue was USD 226.7 million for the October to December 2006 up by 23.8% YoY as compared to USD 183.0 million for the Q4 of 2005. EBITDA was USD 30.6 million for the fourth quarter of 2006 as against USD 23.1 million in Q4 of 2005. ICG reported a net loss of USD 52,000 for the Q4 of 2006 as compared to net income of USD 3.3 million in Q4 of 2005.

ICG said that quarterly earnings were reduced by adjustments to income taxes of approximately USD 1.4 million resulting primarily from a change in estimated state income taxes and lower than expected depletion deductions.

Mr Ben Hatfield president & CEO of ICG said that "We were pleased to achieve our earnings guidance for both the quarter and the year despite multiple operating challenges. The production costs for the quarter were substantially improved by stronger operational performance, coupled with the previously announced idling of several high-cost production units. We also overcame a significant shortfall in brokered coal income as the contracted suppliers encountered various production and shipping hurdles.