The 1998 Annual Meeting speaker line-up
kept with the international theme of the meeting by focusing on
the world economy, NAFTA and other trade related issues. Tuesday's
General Session began with opening remarks by AWPA President David
Foust, who gave a brief summary of the many activities and successes
the association has enjoyed over the previous year.
A panel discussion featuring Raul
M. Gutierrez, President, Canacero, Jean Van Loon, President, Canadian
Steel Producers Association, and Andrew Sharkey, President, American
iron & Steel Institute, on the North American Free Trade Agreement
followed. Raul Gutierrez began his presentation by highlighting
the enormous gains in bilateral trade that have occurred since
the implementation of NAFTA. He argued that the treaty has opened
new prospects for the North American continent and led to significant
changes in Mexican industry.
Jean Van Loon's remarks were summed
up in the title of her presentation "Making Haste Slowly."
Canadian steel producers feel the treaty has created little change
in the trade flows, particularly between the US and Canada. However,
the opportunity to create a real free trade atmosphere is still
a long way away. Ms. Van Loon identified the many continuing
trade actions between trading partners that should be finding
other means to resolve disputes. She characterized NAFTA as a
missed opportunity.
Andrew Sharkey also minimized the
impact of the trade agreement arguing that other influences made
it difficult to ascertain the impact of the treaty. Macroeconomic
factors such as the Mexican recession and the devaluation of the
peso both probably skewed the perceived benefits and have led
to a larger US trade deficit. On the positive side, tariff reductions
have provided the US steelmaking industry with greater market
opportunities in Mexico. Mr. Sharkey characterized the treaty
as having had a "modest positive affect" so far.
Economist Nancy D. Sidhu, Ph.D.,
Vice President, Bank of America, followed the panel discussion,
describing the continuing growth trend of the US economy. Now
in its 82nd consecutive month of positive growth, Dr.
Sidhu attributed much of the economy's success to the policies
of Alan Greenspan. Her world forecast for 1998 showed a continuation
of last year's growth. Decline in Asia, as a result of the financial
crisis still underway, will be balanced by growth everywhere else.
She also believes there will be a slowdown in the US and Canada.
The Consumer Price index for goods in the US will be near zero
growth in 1998, though the prices of services will continue to
rise due to severe shortages of qualified people in certain highly
specialized trades.
Dr. Sidhu answered many questions
from the audience with great flair and insight, following her
presentation. She predicted the growth in sales of heavy equipment
that has been underway for a number of years will continue. She
sees very little hope for any changes in the dollar's exchange
rate. She warned that the debt crisis in South Korea, amounting
to 368 billion dollars for companies other than banks, would force
those companies to seek cash quickly by any means possible.
Wednesday's General Session began
with an overview of the AWPA government relations program by committee
chair, H Woltz, III, Insteel Industries. Trade and environmental
issues topped the list of priorities.
The traditional rod presentations
followed with Sergio Guitierrez educating members on Deacero,
SA de CV. Deacero is a family owned company with 2500 employees,
founded in 1951. Originally a maker of chain-link fence, today
the company is Mexico's largest wire manufacturer, with wire mills
in Monterey, Puebla and Saltillo. There is a new steel mill now
under construction in Celaya that will increase their total rod
rolling capacity to 1.1 million metric tons per year.
Alejandro Cortes Segura briefed members
on the Villacero/Sicartsa facility. Their integrated steel mill,
located at Mexico's major west coast port city, was launched as
a government project in 1976. It was privatized and acquired
by Grupo Villacero in 1991. A unique feature of the facility
is that iron ore arrives by slurry from nearby mines. The ore
is processed by BOF to feed the caster. Sicartsa enjoys 100%
capacity utilization. In 1997, they sold more than 1.3 million
metric tons of semi-finished and finished product, primarily rods.
Later in the meeting, AWPA members traveled to Sicartsa for a
tour of the facility.
Alfonso Acevedo made the final presentation
on Hylsa, SA de CV. The Puebla bar and rod division is part of
Hylsamex Steel Company, founded in 1943. This division operates
a rebar mill known as North Plant at Apodaca, Nueve Leon. The
facility produces about 639,000 metric tons of rod per year.
The company is a leader in the production of direct reduced iron,
and is a major producer of steel pipe and plate. Hylsa has a
total annual steelmaking capability of 2.9 million metric tons.
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