REGINA, Saskatchewan, April 24 -- IPSCO Inc.
(NYSE: IPS; Toronto) saw a new hand at the helm today as David Sutherland
addressed his first Annual General Meeting as IPSCO's President and Chief
Executive Officer. The meeting was the first held since Roger Phillips
retired after twenty years in the position. However as Sutherland pointed out
to company shareholders who gathered in Regina today that, "I have a longer
tenure with IPSCO than Roger -- I joined IPSCO in 1977."
While David Sutherland's title as president is new, his considerable
experience and knowledge is backed by a group of accomplished professionals
who have helped IPSCO grow to become the company it is today. Sutherland
noted, "I feel that questions about how I plan to change the company, are
somewhat misplaced. As I have noted, the company and its management team have
been working with Roger on strategy for the company for many years. We have
all been a part of the growth and will continue to enhance the path we have
been on. We know what needs to be done to ensure that you -- our shareholders
-- receive the return that you deserve on your IPSCO shareholdings."
Sutherland noted that steps to ensure shareholder return have been taken
by expanding the company to include three steelmaking facilities. Regina,
which today is one of the most efficient steel producing facilities on the
continent, Montpelier which is now making steel at volumes that will ensure
its success and Mobile, a 1,250,000 ton steelworks which came on line last
year and is now showing early promise of moving to the first class league of
its sister mills. "These facilities with their geographic and operational
strengths, together with IPSCO's pipemaking and coil processing facilities
strategically located throughout North America position the Company to take
maximum advantage of the steel market," Sutherland advised.
Sutherland noted that IPSCO felt the influence of a number of factors in
2001. Pricing of steel in the last year reached 20 year lows. "Pressure put
on the pricing of almost all steel products by steel being imported into North
America has, at best, drastically reduced the profitability of steel companies
or at worst driven many companies into bankruptcy proceedings or caused them
to cease operating altogether," Sutherland commented. "Clearly there is a lot
of upward movement that is possible," he concluded.
Trade issues also influenced IPSCO in 2001. The Company has been involved
in anti-dumping, countervail and now safeguard actions in both Canada and the
United States in an ongoing effort to fight unreasonable penetration by
offshore steel that is often unfairly traded. Although it was noted that
these cases are often successful, product and country switching have quickly
cancelled out any benefits obtained. IPSCO feels the worldwide surplus of
steel production is at the root of the problems. Talks are underway to
curtail steelmaking capacity at a global level so that production is cut back
to realistically reflect domestic needs and in return put the marketplace back
to a balanced supply-demand situation. However, in the face of a worsening
situation and in order to neutralize the effects of the offshore steel,
safeguard actions have been taken in the U.S. and now in Canada.
The spotlight also turned to the issue of "legacy costs" in 2001. Legacy
costs are made up of health care and pension costs for employees, and in some
instances environmental clean-up costs. Some of the large integrated
steelmakers in the U.S. entered into contracts with their employees making the
companies responsible for the cost of supplying extremely rich benefits on an
ongoing basis. Consequently, the costs were unsustainable and the plans were
often significantly under-funded. Although the contracts were entered into by
the companies of their own volition the affected companies are now looking for
the assistance of the U.S. government to get out of the long-term burden of
these costs. Sutherland noted, "IPSCO has managed its business so as not to
be subject to these costs. IPSCO has been careful and will continue to be so
to ensure that the benefits supplied can in fact, be serviced by the company
over the longer term. IPSCO is opposed to governments taking the
responsibility for such costs for companies. Although some temporary
assistance to employees who must exit the industry might be appropriate,
beyond that companies should stand or fall based on business decisions that
they have made."
Sutherland further remarked that, "IPSCO is a healthy company although
operating in what we consider a very difficult environment." IPSCO's
President feels the blueprint for a sustainable company like IPSCO includes
maintaining financial viability; maximizing the environmental performance of
IPSCO's products through their life cycle; fostering the health and safety of
employees; conducting the business with the highest ethical standards;
promoting values and initiatives that show respect for the people and the
communities in which the businesses operate; and to consistently deliver value
to the customer. Sutherland concluded by saying, "Looking into 2002, IPSCO
will continue to compete in the dynamic business environment that we work in
and we look forward to the challenge."
To hear the Annual and Special Meeting of Shareholders in it's entirety or
for further information on IPSCO, please visit the company's web site at
ipsco.com . |
