TWST: Could we start with a broad introduction to Co-Steel, Inc.?

Mr. Waisberg: The business of Co-Steel is manufacturing steel using electric arc furnace technology. Typically, companies in that business are called minimills, although many of the mills are not mini by any stretch of the imagination. The electric arc furnace business now comprises almost 50% of the total raw steel production in the United States and a little less in Canada. We have three wholly owned steel producing facilities, one in Whitby, Ontario (Co-Steel Lasco), which is East of Toronto, and two in New Jersey (Co-Steel Raritan and Co-Steel Sayreville). In those three facilities we produce long products: principally, reinforcing bar, merchant bar, wire rod and structural products. We also have a 50% interest in a hot rolled sheet facility in Kentucky (Gallatin) with another Canadian company, Dofasco. Finally, we have a recycling operation in Canada because our principal raw material is scrap. To assure ourselves of availability and reliability of our scrap feed, we are in the recycling business. We have the capacity to produce in excess of 3 million tons of raw steel every year.

TWST: Would you tell us about the management team?

Mr. Waisberg: The Chief Executive Officer is Terry Newman, who has been with the company for several years. He started off as a salesperson, rose to become the sales manager at our Lasco operation and then became the General Manager of Lasco. He was promoted from there to become the Chief Operating Officer, and in 1999 was appointed the Chief Executive Officer. I'm the Executive Vice President, and my background is in business law. The two principal operating executives are Frank Hagan and Ray Lepp. Frank is responsible for our two New Jersey facilities. He was associated with Sayreville when we acquired it in the late 1990s. Ray is responsible for the operation of our Lasco facility in Canada. He's been in the steel business from the time he graduated from engineering, most recently as the General Manager of the Birmingham Seattle facility.

TWST: When you look at the market issues on steel products today and cross-border commerce, what has an impact on Co-Steel?

Mr. Waisberg: At Lasco we produce reinforcing bar for the Canadian market and a wide range of bars, shapes and structural products for Canadian and U.S. markets. So cross-border issues are very important to Lasco. Insofar as our US mills are concerned, they don't sell very much into Canada. One of our mills, Sayreville, produces some billets for Lasco but other than that, there's not much flow from our mills in the United States to Canada.

TWST: What has been the impact of the recent debates and trade rep talks on steel imports and dumping and the other issues that relate to pricing and demand?

Mr. Waisberg: Starting off with the trade difficulties, obviously, we're affected by the same issues that all US steel mills are affected by. The massive of influx of imported goods, frequently dumped, has had a very adverse affect on Co-Steel. So some control over imports will help us. There are three things that are going on now. First, there is the US Safeguard action. If a remedy is put in place by the President, that could assist us at Gallatin, where we produce hot rolled sheet, and at Sayreville, where we produce reinforcing bar. We're concerned about the impact of the safeguard proceeding at Lasco because we export a number of products to the United States. Large structural products were found not to be injured in the Safeguard Proceeding by the ITC. On the other hand, a hot rolled bar was found to be injured and Canada was found to be a cause of that injury, so we're concerned about the potential impact of the safeguard remedy. Under the North American Free Trade Agreement, we believe that exports at normal levels from Canada to the United States are protected even under a Safeguard, but we're not sure that the US shares that interpretation. I didn't mention Raritan in the Safeguard Proceeding, and that is because there already is a Safeguard on wire rod, our principal product at Raritan. The wire rod Safeguard is fairly ineffective Second, we're concerned in Canada about the impact of the US Safeguard Proceeding on Canadian domestic markets. If foreign producers can't sell their steel in the United States, some of that steel is likely to be diverted from the United States to Canada. The Canadian steel industry is reviewing the options available to protect against this diversion with Canadian government officials. Third, an anti- dumping and countervail suit was initiated by the US wire rod mills in September 2001. We've had the preliminary injury determination and we expect preliminary duty determinations in March. We are hopeful that this proceeding will reduce the flow of unfairly traded wire rod into the United States.

TWST: When you look at your own products, how confident are you in your ability to forecast? What do you see as demand levels and pricing?

Mr. Waisberg: The issue is not so much demand as it is supply. More steel is produced in the world than is consumed. So the supply side is important. I'll give you an example. In December, we were fairly pessimistic about our prospects at Gallatin for the first quarter of 2002. Sometime in December, LTV indicated that it was going to shut down its operations. LTV's customers got worried and the remaining domestic suppliers of hot rolled sheet suddenly found that their order books were filling very quickly.

TWST: What does that do as far as your own prognostications and looking at what your company will be focused on over the next 12 months?

Mr. Waisberg: We're focused on cost because where there's more supply than demand, the only way to assure long-term survivability and profitability is to be a low-cost producer. Our belief is that if we're among the low-cost producers, we'll be able to generate EBITDA regardless of what the pricing scenario happens to be.

TWST: Does that cost structure allow you to expand?

Mr. Waisberg: We're not looking to expand our raw steel production. We are looking to expand our downstream operations where we might coat, or bend, or cut, or weld our raw steel products.

TWST: Is cash or capital a limitation as you look at the opportunities or the requirements ahead?

Mr. Waisberg: Obviously, the steel industry has gone through such turmoil over the last two years that the capital markets do not look favorably upon participants in the steel industry.

TWST: What effect might consolidation in the industry have, and are there ways in which your organization would participate in M&A activity?

Mr. Waisberg: The first question is, is consolidation a good thing? There are a couple of circumstances when it can be a good thing. First, it may permit the closing of inefficient or unproductive capacity. Second, in some situations there are opportunities for synergies. But if you don't have the opportunity to close down inefficient facilities or there are no synergistic opportunities, consolidation doesn't accomplish much. It might give somebody a little bit of pricing power, but I doubt that. There are just too many steel producers, domestically and worldwide.

TWST: In dealing with the analyst community, with potential investors as they review the organization, what are you hearing from them as far as misperceptions or disconnects?

Mr. Waisberg: I'm not sure that there are any disconnects. What we're telling our shareholders and the financial community at large is, number one, we believe that to be a survivor we've got to be a low-cost producer. Second, we believe that to provide some security for our output we've got to be more involved in downstream operations. I'm not sure that there's a disconnect between what we're telling the financial community and what we're trying to do and what they're expecting us to do.

TWST: What would be the three or four key summary points that convince an investor to buy in?

Mr. Waisberg: Low-cost producer. Well located plants. Productive workforce. Good product delivery. And margin expansion opportunities in the downstream operations.

TWST: Do you feel that you get enough respect for your business model and track record?

Mr. Waisberg: The proof is in the eating I think Nucor has been highly successful, for instance, in showing the merits of the electric arc furnace model and there are many other successful public minimills that have a good following and have demonstrated the viability of the model.

TWST: Thank you. (DWA)

LORIE WAISBERG Executive Vice President, Finance & Administration Co-Steel, Inc. Hopkins Street South Whitby, Ontario L1N 5T1 Canada (905) 665-3708 (905) 665-3718 - FAX www.costeel.com

Each Executive who is the featured subject of a TWST Interview is offered the opportunity to include a Corporate Profile or other highlight material to be provided and sponsored by and for the company.

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