Analysts Presentation Steel NorAm Oct 2006

Foseco Steel NorAmBusiness Review

October 10, 2006

2 Foseco NorAm Business Review

Agenda

• Introductions Lee Plutshack• Foseco NorAm Steel – Overview Mike Fish• The North American Market Bill Jennings• Foseco NorAm’s Focus Bill Jennings• Products and Applications Albert Dainton• Summary Lee Plutshack

NorAm OverviewM. Fish

October 10, 2006


Who are we?

Foseco is a leading supplier of high technology products and value-added services to the steel industry.


NorAm Manufacturing & Laboratory Facilities

• Conneaut - Ohio– Afax granular & powder mould flux production– Turbostop flow control system production– Secondary steel making (SSM) degasser snorkel production– Afax & Foscast quality control labs

• Saybrook - Ohio– Deltek – Carbon bonded ceramics production

• Cleveland – R&D– Afax recipe development laboratory– Foscast refractory development laboratory– Turbostop water model laboratory– Deltek mould model laboratory – mathematical and water modeling


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Mittal Steel

AK Steel

US Steel

Nucor Steel

NorAm Customer Base

Stelco Steel


Steel Making Process

Years of experience focused on the casting deck.


The Casting Deck


A History of Innovation

• Profax/Kalorex Hot Tops - early 60s - Ingots• Garnex Tundish Liners – 1970’s• Afax Granules in North America – 1980’s• Turbostop -1990’s• Integrated Process Improvement - 2000’s

– Unique product portfolio linking the variables in the continuouscasting process.

Foseco has been introducing new technology to the steel industry for over 40 years


Ingot Hot Tops


Garnex Tundish Lining System


Organized to Improve Customer Performance

Service Techs

Direct Sales

VP Sales

R&D/Eng Support

Direct Mktg.

VP Marketing

Cell Mgrs.

Operations Dir.

Finance & Cust. Service

Finance/Commercial

Chief Executive

Application Engineers


Solid Customer Relationships

• Years developing relationships in plant & head office.• Worked with our key customers through good & bad times• Steel Groups R&D work with us in our facilities.• Operators understand the value we bring to the table and

support us with purchasing.

NorAm Steel MarketB. Jennings

October 10, 2006


NorAm Steel Market

• 109 million Tonnes Shipped in 2005– Canada: 14 million tonnes– U.S.: 95 million tonnes

• 55 steel companies with approximately 135 facilities• 9.6% of the world steel production• Largest Markets: Construction and Automotive

– Other Key Markets• Machinery• Containers• Pipe/energy


Global Steel Production

0

50

100

150

200

250

300

350

400

China Europe NORAM C.I.S. Japan S. Amer India

Prod

uctio

n (M

ilion

Ton

nes)


NorAm Production

70

80

90

100

110

120

130

'96 '97 '98 '99 '00 '01 '02 '03 '04 '05

Mill

ion

Tonn

es


NorAm Steel Imports

0

5

10

15

20

25

30

35

'06 '07 '08 '09 '00 '01 '02 '03 '04 '05

Tonn

es


Consolidation of Industry

LTV BethlehemInland SidbecLukens GeorgetownWierton Dofasco

Arcelor/Mittal

USXNational Steel

USS

Nucor Auburn Birmingham SeattleTrico

Nucor

Gerdau AmeristeelMRM AtlanticCo-Steel North StarAmeristeel Cambridge


Consolidating Steel Industry

Pre ConsolidationTop Three

Other68%

Nucor14%

USS10%

Beth8%

Post ConsolidationTop Three

Nucor18%

USS16%

Mittal25%

Other41%


Impact of Consolidation• Steel Companies are stronger financially

– Manage supply with demand – Domestic & Global– Higher steel prices– Less cyclical production and pricing– New labour agreements

• Best Practice Approach– Utilization of best technologies– Global perspective– Value is important

• Value = Customer $ in yield, productivity, quality, etc. – “Foseco”• Centralize Purchasing

– Greater purchasing influence– Fewer suppliers– Price rationalization/down initiatives

• Reduced R& D. – Greatly reduced localized R&D capability.– More reliant on supply chain - “Foseco”


Consolidation – An Opportunity for Foseco

• Financially strong market• Less cyclical market• Demand for innovative technology• Value is key• Market requires development resources


Customers are strong and will Survive!!

• Consolidation provided financial stability• Global focus• Global customers – Automotive transplants• Low man-hours per ton• Raw material stability

– Iron ore, scrap

• Energy efficient• Technology leaders• New production facilities being built

Foseco NorAm FocusB. Jennings

October 10, 2006


Targeted Sectors

• Slab • Thin Slab• Special Bar Quality (SBQ)


Targeted Sectors – Why?

• Customers who appreciate – Value– Technology– Supply chain

• Financial stability– Strong steel markets– Value added steels– Premium price steel producers.

• Similar targeting approach as Foseco


Foseco’s Target - Flow Control on the Casting Deck

Why?

• Critical steel processes require innovative cost effective solutions

• Individually unique casting parameters demand customized solutions

• Application Expertise• Years of Experience in steel

containment, flow and solidification


Why we succeed!

Customised products • Defining the customer’s needs and customizing solutions.

Multifunctional account management

teams • Managing the business at the account level

working with the customer

Engineering expertise • Robotic & automatic application systems . Water modeling services for Turbostop & Deltek

Technical support • Global experience and resource base

Highly trained field sales and marketing

team Understanding the process.


NorAm Sales History

2000 2001 2002 2003 2004 2005 2006

SAL

ES

$

Products and ApplicationsA. Dainton

October 10, 2006


Foseco’s Core Business

The Steelmaking Process


Continuous Casting Process

TUNDISH

LADLE

MOLD


Product Split

CBC10%

Tundish17%

Other3%

Afax40% Turbostop

18%

SSM12%


Where Afax products are used

AfaxMold Powder

AfaxTundish Flux


Mold Fluxes NorAm Market

Stollberg55%

Metallurgica10%

Foseco27%

Others 8%


AFAX - Continuous Casting Fluxes

• High cost of entry– Heavy investment in plant, quality

control and people• Highly technical product

– Each plant has different casting conditions

– Usually 4-5 different grades• High risk

– Last and most critical consumable in the hot end process

• Highly sustainable– Multiple formulations – Changing requirements– Regular re-engineering of product


Low High

Low

Hig

h

Tech Sales Input

Offe

r Diff

eren

tiatio

n

Tundish Flux

“Integrated” Strategic Positioning

Med

Med

Afax Product Positioning

Mold Powder

Basic TD Covers

Engineered Mold

Solutions


1986 1989 1992 1995 1998 2001 2004

Afax Sales DevelopmentSA

LES

$


Where Turbostop is used

TURBOSTOPSYSTEM


Tundish Flow Systems NorAm Market

Foseco41%

CCPI22%

Vesuvius20%

Others 18%


Turbostop - Tundish Flow Systems

Key features• Highly technical product

– Each steel plant has different casting conditions

– Usually 4-5 different grades• High risk

– Steelmaking process re-engineered to custom design

• Highly sustainable– Multiple formulations – Changing requirements– Regular re-engineering of product


Low High

Low

Hig

h

Tech Sales Input

Offe

r Diff

eren

tiatio

n“Integrated” Strategic Positioning

Med

Med

Turbostop Product Positioning

Custom DesignedTurbostop

Traditional Methods

GenericShapes


Turbostop Sales

0123456789

1994 1997 2000 2003 06 Proj.

SAL

ES

$


Where Deltek products are used

Deltek Ladle Shroud

DeltekStopper Rod

DeltekSES

Deltek SEN


CBC Flow Control Systems NorAm Market

Vesuvius70%

Japanese11%

Foseco5%

Others 14%


Deltek Flow Control Systems

• High cost of entry– Heavy investment in plant, quality

control and people• High risk

– Product issues result in high cost to steel plant

• Highly technical product– Each plant has different casting

conditions– Each customer has 3-5 shapes unique

to his plant– Requires custom design and modeling

of process• Highly sustainable

– Multiple formulations – Changing requirements– Regular re-engineering of product


Low High

Low

Hig

h

Tech Sales Input

Offe

r Diff

eren

tiatio

n

Low endcommodity products

“Integrated” Strategic Positioning

Med

Med

Deltek Product Positioning

Custom Designed Products

Engineered Pouring

Solutions


Deltek Sales

0

1

2

3

4

5

6

2001 2003 2005

SAL

ES

$


Foseco Product Synergies

Deltek Ladle Shroud

DeltekStopper Rod

DeltekSES

Deltek SEN

AfaxMold Powder

AfaxTundish Flux

TURBOSTOPSYSTEM


Casting Deck Synergy


The Foseco Advantage

• Foseco is the only supplier that is equipped to provide integrated caster flow control and flux solutions

• All three product areas interact and have a significant effect on the quality and yield in the steel plant

• We have significant expertise in this area of the plant including equipment and software control

• Thus we can leverage and exploit the synergy

Summary Strategic OverviewL. Plutshack

October 10, 2006


Success - Clear Direction and Focused Approach

• Foseco business model can be applied in Steel• Steel has successfully repositioned itself to changing industry

requirements• Steel has an experienced team• Product lines of strategic interest

– CBCs are an important part of Steel’s future and we are very optimistic about our future success

– Turbostop and Mould Flux are also very interesting opportunities• Very successful where focused

– No. 2 to Vesuvius in Carbon Bonded Ceramics in Europe– No. 2 to Stollberg in Mould Flux in North America– Globalization of Turbostop

• Focus resource on value-added opportunity• Compete on technology & service• Exploit the synergies of our unique product portfolio• Steel profitability will improve

Documents

Analysts Presentation Steel NorAm Oct 2006