New Management Takes Over

Hoogovens Technical Services Technological & Operational Assistance Inc. (HTS TOA) will assume the management of Sydney Steel Corporation effective Aug. 3, with the intent to form a business consortium within five months for the takeover of Sydney Steel.

"Hoogovens is one of the largest, most successful steel companies in the world," said Economic Development and Tourism Minister Manning MacDonald. "In fact, part of its business is providing expertise to other international organizations. If anyone can make Sysco work, it's this company."

HTS TOA is one of sixteen business units of Royal Hoogovens, an international company based in The Netherlands with core activities in steel and aluminum. Royal Hoogovens employs 22,000 people and produces approximately 6.7 million metric tonnes of steel annually. Last year, Royal Hoogovens' turnover was $6 billion (Canadian) with net profit of $370 million (Canadian).

HTS TOA focuses on technical and operational assistance and training. The division's Canadian offices are located in Burlington, Ontario.

For the past number of years, HTS TOA has worked as a technological partner with Grupo Acerero Del Norte of Mexico (GAN). The company has gained a good working knowledge of Sydney Steel over the past year, working with GAN in its bid to purchase the plant. HTS TOA has visited the plant and contributed to the business plan prepared by GAN.

"While the lead company may have changed, we haven't lost momentum in working toward a sale," said Mr. MacDonald. "Not only does Hoogovens have worldwide expertise, they have first-hand knowledge of the plant and local issues."

An experienced management team of 15 to 20 specialists will move into the plant to produce: a bankable business plan; a marketing and sales plan; a comprehensive training plan for existing and new employees; a product development program; a strategic energy plan; an environmental plan; and transition to a long-term collective agreement. One of the company's goals is to increase Sysco's order book and increase the production level from the current level of 200,000 tonnes.

The team will also work with the provincial government to determine the final terms of sale, including all financial details. Jim Rudderham will remain as president of Sydney Steel.

"We are serious about Sysco," said Rick Lawler, managing director of HTS TOA. "We will do everything we can to find new owners for Sysco and make it sustainable for the future. We want to work as a partner with the community, unions and government and ensure an open door atmosphere."

To ensure regular business operations until a sale is finalized, the province will extend the timeframe for Sysco's line of credit to Dec. 31, 1998. "This does not mean new money," said Mr. MacDonald. "Sydney Steel has turned a profit for the last number of months. In fact, it still has a balance remaining in its current line of credit. This is simply an extension of time for a sale to be completed."

The minister also noted that Sydney Steel Corporation is currently in the process of reestablishing its long-time supplier relationship with CN and expects to supply rails to them during the fourth quarter of 1998.

"We believe this will be a deal that works for the long-term --for employees, for the local area, and for the taxpayers of Nova Scotia," said the minister.

NOTE TO EDITORS: Royal Hoogovens' website address is www.hoogovens.com. Additional information on Royal Hoogovens and HTS TOA are available by calling Felicity Stevens, Hoogovens Technical Services, 905-631-6166 or Heath Campbell, Sydney Steel Corporation, 902-564-7931.