Australian Steel Company Acquires Scrap Operation

Subject to due diligence, Smorgon Steel has agreed to purchase the South Pacific scrap metal collection assets from the Wanless Group of Companies. The Wanless Group has operated scrap metal facilities in the South Pacific for eight years. The company has established a strong presence in both Papua-New Guinea and Fiji. The existing relationship between the parties in Australia, under which Wanless supplies Smorgon Steel Recycling with scrap and purchases its other metal requirements from Smorgon Steel Distribution, will continue. It is expected that due diligence will be completed prior to 1 September 2003.

Smorgon Steel Recycling has also announced that it will open an India Trading Office in New Delhi next month.

In making these announcements, Ray Horsburgh, Smorgon Steel’s managing director and CEO, noted "While neither of these decisions is large, they are consistent with our previously announced strategy of pursuing small bolt-on expansion opportunities that will add value to shareholders over time." He added "We have begun to see real benefits from our China and New Zealand Trading Offices which we opened earlier this year. Given India's growing importance in all aspects of the global steel and metals recycling industries, the creation of a physical presence in that market is important for the future of our recycling business."

Shane Grice, chief executive of Smorgon Steel Recycling referred to the established relationship between Smorgon Steel and the Wanless Group. "We have dealt with the Wanless Group for a number of years. We know them well and regard them highly. An important aspect of this acquisition for us is that the management team will enter into long-term employment agreements with Smorgon Steel."