Steel Products
A.M. Castle Announces Restructuring Plans
Written by John Packard
January 18, 2013
Written by: Sophia Fain
A. M. Castle & Co. announced restructuring plans to improve annual operating profit by $33 million once fully implemented in 2013. Changes to its metals business include an organizational restructuring, warehouse realignments and performance improvement programs.
“This broad, performance-enhancing plan will enable us to better serve our customers by organizing our operations around them and their needs,” said Scott Dolan, president and CEO. “Our goals are to simplify how we do business, optimize inventory levels, reduce waste, and improve on-time performance, which we expect will help us increase revenue while reducing costs.”
The organizational restructuring means moving from the current decentralized commercial unit structure to a centralized approach with support functions and three vertical sales teams. Those sales teams will each be led by a vice president and will provide specialized expertise to customers in Castle Metals’ Aerospace, Oil & Gas, and Industrial markets. Castle Metals is also adding a new sales incentive program, under a new position of Chief Commercial Officer.
The company reports, “As part of its branch fulfillment network realignment, the Company plans to consolidate five warehouse facilities into the existing network. The Company currently operates 30 metals segment branches in North America, Europe and Asia, which include warehousing, sales, product processing and other operations. Castle will maintain local sales offices to continue serving customers in the markets in which it plans to close warehouses.”
Performance improvement efforts will include implementing a continuous performance improvement program focused on direct and indirect sourcing, transportation, strategic pricing initiatives, back office functions, and optimizing inventory investment.
However, the restructuring will reduce the Company’s workforce by about 10 percent.
The company also wants to reduce Days Sales Inventory to less than 150 by the end of 2013 and 120 by the end of 2014.
Dolan added, “In terms of sales activity and recent market trends, we experienced softness in demand that was greater than anticipated during the fourth quarter, as well as lower activity levels due to extended seasonal shutdowns. In addition, the monthly Purchasing Managers Index trends for the fourth quarter were consistent with third quarter levels, including a November 2012 reading that was below the 50.0 expansion level.”
Dolan concluded, “We are forecasting that the overall business conditions we experienced in the fourth quarter will continue, and we believe strongly that the actions we are taking will position the Company to operate successfully through all market cycles.” (Source: A. M. Castle & Co.)
John Packard
Read more from John PackardLatest in Steel Products
Rig count update: US activity stable, Canada slips
The number of oil and gas rigs operating in the US remained unchanged this week for the second consecutive week, while Canadian activity declined, according to the latest data released from Baker Hughes.
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
Domestic, offshore CRC prices steady
The price spread between US-produced cold-rolled (CR) coil and offshore products on a landed basis was unchanged in the week ended Dec. 20.
SMU Survey: Mill lead times contract slightly, remain short
Steel mill production times have seen very little change since September, according to buyers participating in our latest market survey.
Worthington Enterprises’ earnings dip in fiscal Q2’25
Worthington Enterprises' profits edged down in its fiscal second quarter of 205 vs. a year earlier. The company said a slump in sales in the quarter was due largely to the "deconsolidation" of the Sustainable Energy Solutions segment in the fourth quarter of fiscal 2024.