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The Bekaert Group announced that it will phase out its U.S. steel wire operations at its Shelbyville plant in Kentucky, laying off approximately a hundred employees.

A press release said that Bekaert intends to phase out the steel wire production at the plant by January 2020. The Shelbyville plant makes steel wire for various applications and markets, including the construction, consumer goods and various industrial sectors.

“External developments in demand and pricing trends have had a negative impact on the profitability and competitive position of Bekaert Shelbyville over the past years, calling for a realignment of our steel wire solutions activities in the country,” the release said. The Dramix® production line serving concrete reinforcement markets will remain in Shelbyville until a permanent location is determined.

Some of the product lines made at Shelbyville will be moved to two other U.S. Bekaert plants—Van Buren, Arkansas, and Orrville, Ohio—while others will be stopped or sourced and distributed through alternative channels. The plan is to extend the manufacturing operations in Van Buren and Orrville with the respective technology and expertise.

“Management regrets the need to implement this measure, but sees no other option to safeguard a long-term competitive position of its steel wire activities in North America,” the release said. “The business conditions have trended lower in various sectors as a result of tighter markets and continued uncertainty. Our tire markets held up well in the first nine months of 2019 but are expected to slow down in the fourth quarter as a result of the normal seasonality and destocking actions throughout the supply chain in anticipation of a continued weak business climate. The steel wire solutions activities are projected to further contract in the last quarter, mainly because of the impact of the social protest actions in Latin America, trade tariffs, and further economic slowdown globally. We do not foresee a downturn in construction markets other than the usual seasonality impact and we expect the business environment of Bridon-Bekaert Ropes Group to remain challenging.

In this scenario of economic slowdown and year-end seasonality, Bekaert continues to implement actions to offset the external headwinds, said the release, which focused on specific elements. “These actions are focused on managing cost, pricing, mix and footprint and aim to deliver an improvement of the underlying business performance. We are also further improving our working capital level and debt position and are well on track to bring our debt leverage below 2.5 by year-end.”

The BSRM Group reports that it is establishing a wire manufacturing operation—called BSRM Wires—in Bangledesh that will focus on making wire products that are currently imported.

Per a story at www.thedailystar.net, the company plans to spend approximately $54 million to build a plant in Chattogram. It cited a "booming" steel industry that is supported by "mega projects that the government has set in motion," and that BSRM Wires hopes to "capitalise on the impending construction boom in Bangladesh."

In the story, BSRM Group Chairman Alihussain Akberali said that the plant will make four types of wire that are currently imported. He observed that while prices for raw materials of wire are very low in the international market but the prices of the finished goods end up being high for Bangladesh due to imports. "Local manufacturing will reduce their prices," he said.

A project proposal cited a combination of galvanized wire, LRPC wire, welding electrode and carbon wire. The plant will have the capacity to annually manufacture 77,000 metric tons of wires when it opens in 2020. The plant will create some 400 jobs, bringing the BSRM’s total employment to 4,700.

The main product focus of BSRM is rebar, but it also has a plant at Nasirabad in Chattogram that manufactures wire rod. That plant, described as "the first and only company to manufacture high-strength reinforcement wires in Bangladesh," has annual capacity of 24,000 metric tons of wire rod.

The new project has seen strong support from the banking sector, led by Dhaka Bank and six other banks —Bank Asia, City, NCC, Modhumoti and Mercantile—and one financial institution, the Saudi-Bangladesh Industrial and Agricultural Investment Company. The banks have invested in the project as it would have a direct impact on the economy, said Syed Mahbubur Rahman, managing director of Dhaka Bank. "The project has good prospects," he said.

 Japan’s Kobe Steel, Ltd. and shareholders of Kobe Special Steel Wire Products (Pinghu) Co., Ltd. (KSP), have agreed to invest approximately $8 million increase the production capacity of the Chinese joint venture that processes special steel wire rod into steel wire.

A press release said that the latest announcement marks the fifth time that production will have been increased for the joint venture, which includes partners Shinsho Corporation, Osaka Seiko Limited, Meihoku Kogyo Co., Ltd., Metal One Corporation and Kyodo Shaft Co., Ltd.

KSP was established in 2007 to supply steel cold heading (CH) steel wire to parts manufacturers for use in making products such as automotive bolts, nuts and bearing products, the release said. Full-scale operation began in 2009. Kobe Steel provides all special steel wire rod used by KSP to ensure that the joint venture production has the same high-quality material.

The release said that the latest capacity expansion was needed to help meet the growing needs of KSP’s customers. Approximately $8 million will be spent to install three additional wire drawing machines, for a total of 11, and two more heating furnaces, bringing the total to eight. The new equipment is anticipated to start up in March and June 2020, respectively. Production capacity will increase to 5,500 metric tons per month, it said.

Kobe Steel has positioned Japan, the ASEAN countries, North America and China as four major areas to process special steel wire rods for supply to parts manufacturers who have set up operations in these countries and regions. To date, Kobe Steel has established two plants in Thailand for wire rod processing, one in the U.S., one in Mexico, and four in China. Looking to the future, Kobe Steel will continue to develop its supply network for high-quality special steel wire rods centered on these four areas.

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