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

SMU scrap market survey results now available
SMU’s inaugural ferrous scrap 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 flat-rolled survey results are also available under that selection. If you need help accessing the survey results, or […]

SMU flat-rolled market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members.

US HR prices pulling away from offshore tags
Hot-rolled (HR) coil prices moved up again in the US this week, while tags abroad were largely flat. The result: the margin US hot band holds over imports on a landed basis widened further.

ArcelorMittal to start building Calvert NGO electrical steel line this year
ArcelorMittal announced on Thursday that it will begin the construction of its new $1.2-billion electrical steel mill in Alabama later this year. The steelmaker said it is proceeding with plans to build the new greenfield mill near its existing AM/NS joint venture in Calvert, Ala. The ArcelorMittal Calvert plant will have an annealing pickling line, […]

AISI: US steel shipments rise in December
Domestic steel shipments increased month over month and year on year in December, according to the latest data from the American Iron and Steel Institute (AISI). US steel mills shipped 7,145,016 short tons (st) in December, up 0.9% from 7,082,921 st in December 2023 and 6.6% higher than 6,702,557 st in November 2024. For the full-year […]