The following is from an interview published in The Wall Street Transcript, dated December 22, 1997. The entire interview will be published over the next few days.
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TWST: Give us an idea of the competitive landscape. What are the types of companies, sizes, and breadth of product ranges that you are competing against? How do you see that head to head competition?
Mr. Hardy: Obviously the people in the steel business are much larger than Stelax. The competition varies according to which particular market you are going into. We are addressing a market that the stainless steel producers would probably not normally see as a large market for them. That is the re-bar, the reinforcing bar that goes into concrete. The reason we are able to address a market like that is because our products sell for half the price of stainless steel. Therefore, it makes us competitive to the epoxy coated rebar and the other ways that the industries try to make re-bar non-corrosive.
In the straight stainless steel area, we feel that we have probably opened up markets in other areas as well, besides the rebar, because of our lower cost. It is a situation where you compete on one end with carbon steel, then on the other hand with stainless steel. Those markets have been well established for a long time.
We like to think of ourselves as the plywood of the steel business, where you are able to get the attributes of the expensive cladding with a cheaper core. We feel that we will have the same success that plywood has certainly had in the wood industry.
TWST: Looking ahead over the next two to three years, are there plans or opportunities using acquisitions, mergers, strategic alliances, or joint ventures for your company? Do you see specific markets, functions, or other areas that need to be filled in that these strategies would impact?
Mr. Hardy: Absolutely, there is no question, for us to build and develop the market worldwide within ourselves would be a slow process. It would meet our objectives to be able to get this product to market worldwide in a timely manner. We definitely feel that strategic alliances are a necessity. We are actually working on some of those at the present time but have not concluded anything as of today.
TWST: Is your company a potential takeover target?
Mr. Hardy: It is hard to speak objectively about that. Obviously, I am prejudiced about Stelax. I feel that it is a very attractive company, but it is not our objective to be taken over by any means. You have to feel that in a business like the steel business, where margins are very low and very competitive, if you have a new product in the steel business that offers multiples of the present margins, then I am sure there would be some interest that exists.
A year from now our profit per ton shipped is certainly going to be one of the leaders in the steel business.
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