The decision was driven by the company’s review of its Australian steel business product portfolio and facilities footprint announced at its annual general meeting last year.
The OGP business makes and sells about 40,000-50,000 tonnes of pressure pipe a year to the oil and gas and steel distribution markets in Australia.
It employs 56 people.
Due to the closure, the company will write-down about $13 million worth of assets – including goodwill – and incur a restructuring charge of about $5 million, both before tax.
This will be reflected in the 2011-12 financial year results.
It is expected most of the restructuring costs will be met out of working capital.
Onesteel intends to sell the OGP plant, equipment and related land.
It hopes this will reduce the net loss on the closure.
If enough money comes from the sales it could even result in a “net cash inflow”
This story first appeared on ILN's sister publication EnergyNewsBulletin.net.
