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Enhancing Steel Team Strategies for Cost Reduction and Market Competitiveness

This document outlines key strategies for the Steel Team to leverage global market knowledge, utilize consolidation for savings, and identify new technologies for lower cost opportunities. It emphasizes the importance of driving competitive tension to obtain the best-cost materials and incorporates tactics like global hot-rolled steel pricing analysis and a revamped flat rolled see-through program with key mills like Nucor and Steel Dynamics. Additionally, the report includes identified cost reductions totaling $1.4 million and various initiatives aimed at enhancing operational efficiency and cost-effectiveness.

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Enhancing Steel Team Strategies for Cost Reduction and Market Competitiveness

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  1. Steel Team Strategy • Leverage Global Market Knowledge • Utilize Consolidation as a Means to Drive Savings • Identify & Develop New Technologies that will Provide Lower Cost Opportunities • Drive Competitive Tension to Generate Best Cost Materials • Tactics include:

  2. Global Hot Rolled Steel Pricing Analysis (w/Bethlehem in the Mkt.) Source: NAPM & World Steel Dynamics

  3. EMR’s Management of the Current Steel Market (cont’d) • Re-Create the Flat Rolled See-Through Program • In this program, EMR controls the mill price and mill relationship. Distributors will in turn process the material at our contract price • Nucor and Steel Dynamics will be the key mills • Drive Cost Reduction Opportunities • $1.4 million identified • Evaluating Steel Import Options & Exclusion Opportunities

  4. Steel Team FY03 Key ProjectsCost Reduction/Misc. Projects Annualized Savings $000 Fiscal 03 Savings $000 • Hylsa Tension Leveling Cost Reduction $300 $75 • Aluminum Sheet FMKT Event $300 $100 • Hylsa Eliminate Cleaning Line Cost Reduction $273 $159 • Eliminate Re-rolling EG Material at EAC $200 $100 • Hylsa Chemistry Modification Cost Reduction $196 $98 • Material Grade Change at Western Forge $120 $60 • Hylsa Packaging Cost Reduction $60 $15 • Extend Payment Terms on additional $80mil • Total $1,449 $607

  5. Corporate Steel Team Web Site Information Accessed Through Our Steel Team Web Site: Organization Chart Steel Newsletter 2000-2002 Steel Conference Industry Links Quarterly Commodity Reviews Calendar of Events Commodity Inflation Forecasts Contract Database 5-Year Inflation Forecast Team Projects Spot Purchase Program FMKT’s Events Preferred Supplier List FMKT’s History Steel Team Newsletter WebCast of 201

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