John Lysaght Australia, Springhill Works

The John Lysaght who lent his name to the Australian coated steel products company was an Irish-born civil engineer who in 1856 acquired a small galvanising business in Bristol in southern England. The business had been owned by the father of a friend. After his father’s death, the friend had no wish to manage the business and made it a gift to John Lysaght – a most unusual start for what was to be a most successful business career.

Lysaght visited Australia in 1879 and while there arranged the formation of a local subsidiary, the Victoria Galvanised Iron and Wire Company, to be the selling agency for the UK parent firm.  That company was incorporated in 1881 with an authorised capital of £162,000, and described as “Ironmakers, Galvanisers, Constructional Engineers, Wire Netting and Holloware Manufacturers”. It became a public company in 1901 with an authorised capital of £700,000.  

At that time, William Sandford was operating a sheet mill and galvanising plant at the EskBank (Lithgow) Iron Works, producing a relatively modest output of 2500 tons/year.  This was the first sheet rolling mill in Australia. Sandford made two attempts (in 1901 and 1907) to interest the Lysaght organisation in their investing in, or taking over, his plant, but no agreement could be reached.  But there was no doubt the coating of steel was a value-adding exercise – in 1907 for example, the NSW Government contract supply price with EskBank was £4/ton for pig iron – and £17/ton for 24 gauge galvanised iron sheet.

The event which was to add much impetus to consideration of local manufacturing was World War I.  Immediate prewar levels of 85,000 tons/year import from the UK fell to near zero by 1918 as a result of the war, with resulting shortages in Australia.  The Australian government had been pushing for local manufacture from 1916, and in that year the board of the local company had given favourable consideration to setting up a venture, preferably, from their perspective, in association with BHP in Newcastle.  In that year also the company acquired land adjacent to BHP in Newcastle. Lysaghts Newcastle Works Ltd was incorporated on 15 March 1921 with an authorised capital of £200,000 and production commenced in April. (Note that the Lysaght corporate entity and components of it underwent a number of name changes over the years.  Here, unless the name details are relevant to a point, the group is referred to generically as JLA.)  

At that time the (now Hoskins Iron and Steel) EskBank Works was still producing coated steel product, and seen by BHP as a potential threat.   At a meeting in Wales on 30 May 1925, senior personnel from Lysaghts and BHP (including Essington Lewis) discussed the possibility of some form of amalgamation of interests.  That included the possibility of Lysaghts taking over the Hoskins enterprise. Notwithstanding interest shown by BHP oficers, the BHP Board ultimately decided not to progress the issue.

Cooperation with BHP continued however, and when in August 1935 BHP merged with Australian iron and Steel at Port Kembla it was agreed shortly after that JLA would purchase the sheet mill and galvanising facility at Port Kembla.  This would be on the basis that they would construct a new plant of at least twice the nominal capacity of the former AIS plant; they were also required under the agreement to produce at least 20% of their output from Port Kembla.  These conditions were agreed, and the plant was taken over for a total investment of £171,000 including mills and galvanising pots valued at £50,000 – and so production by JLA at Port Kembla commenced, initially on the AIS site.

On 28 December 1937 JLA bought a 40.5ac (16.4ha) site with a 797m frontage to Springhill Road, between Wollongong and Port Kembla.  This was to be the location of the Springhill Works. Meanwhile JLA operated the former HI&S sheet mill, with much success – rapidly raising its production (of what had been a serious problem for HI&S) to a normal output level for its size.  The output in 1936, the takeover year, was some 10,000 tons and 1937 saw an output of nearly 21,000 tons. At the same time, work was continuing on the development of facilities at the Springhill site, and by April 1938 it was possible to start transferring the first component of the former HI&S/AIS sheet mill plant, a galvanising pot.

The AIS facilities gradually closed and by December 1938 were shut down.  They restarted at the Springhill site on 9 January, 1939, no mean feat given the scale of the task.  `The installation of further new plant, and the replacement of some of the former AIS plant, continued through 1939, with output being maintained at some 26,000 tons of galvanised product.  But while this work had been progressing, the company had been active in another area also – an area which reflected the view of both JLA and BHP that future sheet steel demand would see a major shift towards higher surface quality product.  The agreement with BHP had in fact included an undertaking that JLA would move to produce “…motor body and other high grade sheets to meet all Australian requirements.” This saw the arrival of another player in the local industry – the American Rolling Mill Company (Armco).

Armco had been interested in importing high finish quality product from their works in the US. But, as Richards[1] put it, JLA were aware that “…every 10,000 tons of finished sheet imported meant a loss of 25,000 tons of coal, 20,000 tons of iron ore, together with lost power sales and lost job opportunities.” So local production was viewed as a necessity. After discussions, on 28 July 1938 an agreement was signed between JLA and Armco to build a new plant and introduce the manufacture of high finish steel sheets to Australia. The company which would do that was Commonwealth Rolling Mills (CRM), with an issued capital of £50,000 divided equally between Armco and JLA interests. The term of the agreement was for a little over thirty years. It was notable also for its recognising the likely future use of strip feed to their rolling mills, rather than sheet feed used initially. The plant was to be built on a site Armco had purchased at Port Kembla in May 1935.

The plant had an overall capital value of £731,025 including £632,000 in plant and buildings. It had a design capacity of 30,000 tons/year of high finish sheet steel, and comprised bar shears, hot mills, a 3-high cold mill, temper mills, a normalising furnace, pickling and annealing facilities, and services infrastructure to support these. The overall facility started in January 1939, and by 1941 was able to produce 44,046 tons in the year. Wartime then brought a much reduced emphasis on high finish quality sheets, in favour of matt finish sheet – which was to impact on revenue also.

While the facility itself was a success, the arrangement with Armco was to be a relatively short-lived one. In April 1945 Armco offered to sell their share of the company to JLA, and the offer was accepted. CRM thus became fully owned by JLA. On 7 June 1950, CRM went into voluntary liquidation, with all its assets having been sold to JLA. The operation at that point became the CRM division of JLA.

World War II not surprisingly had major impacts on JLA in a variety of ways, including for example major corrugated sheet exports to the UK for use in the Anderson Air Raid Shelter program. More basic effects came from the rationing of input materials including steel and zinc. War circumstances also brought to the Springhill plant the first woman employed in production, in 1941. But there were also important new contributions made to the war effort. JLA’s Newcastle group was a major player in the development of novel bullet-proof steels, for use in such applications as personnel carriers and scout cars.

The Springhill plant was home to the development and manufacture of what became the Australian Army’s standard machine gun, named after its inventor, the Owen gun.  The history of the Own gun is a complex story of the difficulties involved in innovation. Nonetheless, these difficulties were overcome, and JLA was to produce for the use of the Australian Army 45,000 of these weapons, and half a million magazines to accompany them. At peak rate JLA were producing some 800 guns per week – with their design and assembly essentially carried out in house. More information is available here.

With the end of the war it was time to once again look to future development. JLA were aware of BHP/AIS plans to develop a hot strip mill, and were interested in preserving their rights under the BHP/JLA agreement to the cold reduction area. There was accordingly authorised in June 1948 a new wide, single stand, reversing cold reduction mill, which commenced production at CRM in May 1951. The mill initially rolled sheet feed, but in recognition of coming strip production, JLA imported pickled hot rolled strip from the UK for trials on the mill.

With the issue of strip feed in hand it was an obvious challenge to pursue the elimination of the batch processing by which galvanising was then carried out. While the majority of continuous galvanising lines elsewhere in the world used one of the two principal competing processes, JLA after much assessment and research opted for a third, one developed by US steel company Bethlehem Steel and two of their equipment suppliers. Further research and testing followed, to better understand the means by which the product properties of material produced from a new process might be better aligned with the properties of material already accepted in the market. No 1 Continuous Galvanising Line came into operation in 1961, at a project cost of $M14.4. The Bethlehem process combined the functions of annealing and galvanising, where these were separate in the batch process. It could operate at a line speeds of 100m/min, for an output capability of 140,000 tons/year. This was achieved at lower cost, with better product quality control.

At the same time, production from the Port Kembla site continued to grow, both from the transfer of certain products from Newcastle, and through market growth. The latter was due in part to extensive and ongoing research and development in coating materials (both metallic and organic) and processes. In one example, in the late 1950s interest had developed in possible organic coating systems. In conjunction with US suppliers JLA built a line to manufacture steel strip coated with a thin polyvinyl chloride layer. This provided durable and versatile sheet which was to become a major product for the company. The product – Marviplate – was trademarked by JLA in 1960: by 1962 its use had rapidly been spread into areas as diverse as home appliances and wall panelling. Initially manufactured in Newcastle, the product was transferred to Port Kembla in 1970.

The second continuous galvanising line (designed for heavier gauge material than the first) came into service in 1964; and the third (a lighter gauge line like the first) in November 1966. This No 3 line, the fastest in the world for a period, was made necessary by the popularity of another new product, Galvabond. This period had also seen the installation of a high speed temper mill in 1965.

Another product line transferred from Newcastle to Port Kembla and commissioned in November 1966 was that of electrical steels – steel with specific magnetic properties making it suitable for use in transformers and electric motors. Formerly made from hot rolled steel, the operation located at CRM used cold rolled steel which was then subject to very carefully controlled annealing and decarburising in a 107m long strand furnace with accurately controlled temperature gradients and atmosphere. The previous year, the first wide paint line had been commissioned at CRM. The line was able to treat material up to 1220mm wide, in 10 ton coils. Built with a single painting oven, the line initially required two passes of material for a two-coat system; in 1970 a second painting oven was installed to allow two coats to be applied in one pass.

Market conditions were good for JLA in the mid to late 1960s, which saw JLA achieving a total production of one million tons by 1970 (including some export) and a domestic sales tonnage of 1.02 million tonnes in 1974. That however was to prove to be the peak for some time, although the growth of the period before had been a factor in the supporting proposals for a new steel plant at Western Port. Those proposals involved JLA, GKN (JLA’s English parent) and BHP – the latter for their supply chain involvement.  A formal Joint Venture arrangement between GKN and BHP was set up after a meeting of their directors in Honolulu in October 1967. Less than two years later, that cooperation was made all the closer when it was announced that BHP would acquire all the public shareholding in JLA, with subsequent arrangements formalising the joint and equal ownership of JLA by GKN and BHP.

JLA Port Kembla at this time had been growing both from its own process outputs, and also from the transfer of production from Newcastle. That process was accelerated by a review in mid 1971 requested by the GKN/BHP Board (as joint owners) of the viability of the Newcastle site. That review found that closure was not appropriate at that time – but within a year it had become apparent that cessation of production there would be necessary.

The period of the 1970s was one in which the development of the new Western Port works was very much the focus of the company. The Port Kembla facility however continued to grow, with additional coil annealing furnaces installed, and a doubling of the electrical steels capacity. A new coil paint line was commissioned in 1976 at a cost of $14.2M. To support what was regarded as a revolutionary new coated product, Zincalume, the original No 1 Continuous Galvanising Line was modified extensively. Initial product quality problems were encountered with the product, but were resolved in conjunction with Bethlehem Research, the original developers of the product. The product went on to become one of JLA’s most successful products, with JLA becoming a world leader in the technology and manufacture of it.

The 1970s ended with an historic change for JLA when BHP in December 1979 bought the 50% share held by GKN. JLA was now a wholly owned subsidiary of BHP, as was its principal supplier and nearest neighbour – Australian Iron & Steel. Two further step changes occurred over the next few years. In the first, JLA acquired the total assets of the Comsteel flat products division, with Lysaght Stainless becoming a fifth division of the company. This was augmented by the acquisition of the stainless steel tubing business of Email in Australia and NZ in 1985. The second effectively marked the end of JLA as a literal organisational entity, when in a BHP reorganisation, JLA became the Coated Products Division of BHP Steel International.

A major upgrade at the Springhill plant took place from 1985, with the two original pickle lines being replaced with a new and innovative pickle line design. In this design the pickling stage was close coupled with a cold mill, the two essentially operating as a single unit, a coupled pickle cold Mill (CPCM). The new design incorporated entry and exit accumulators to provide a degree of flexibility in operation. The combination (CPCM) offered significant improvements in productivity and product quality. It was commissioned in mid 1989, achieving 70% of rated output within six months.

In 1992 a major fire occurred when a metal launder passing through a cable duct blocked and initiated a fire which effectively damaged entire cabling sets and control panels in the galvanising plant basements, requiring the recabling and re-commissioning of three production lines. The major re-equipping task was completed in just six weeks.

Developments of the 1990s were largely focused on existing product lines with objectives in productivity, output, and working conditions. The CPCM mill was fitted with a carousel reel on the exit end, eliminating the downtime associated with stopping the mill at the end of each coil to change coils and with obvious productivity gains. On a broader scale, a comprehensive coil storage and handling facility was developed, using automated guided vehicles (AGVs) and computer controlled cranes to handle and manage the product coil inventory and shipment. With significant productivity and coil quality gains, the facility also had the effect of removing substantial forklift truck traffic within work areas. The system employed some sixteen AGVs as against the eight employed in the largest such system elsewhere at the time. These facilities were commissioned in 1995/6.

A further area in which automation and mechanisation brought substantial gains was in the coil packaging area, where what had been an arduous and labour intensive task in applying protective wrapping to coils for shipment was replaced by a locally-designed and manufactured packaging line, with material productivity gains. Another innovation was the introduction of a (again locally designed) dual roller head system on the paint line, which allowed paint colour changes without having to stop the line to clean the single roller head. Both these upgrades were completed in 1996.

The 2000s saw largely ‘brownfield’ (incremental, existing process) capacity upgrades and process rationalisation such as the transfer of a slit recoil line to Acacia Ridge Service Centre in Queensland, the latter reflecting the extent to which final market product production was being carried out at local service centres throughout the country. In 2005 the Bluescope tinplate production facilities adjacent to the JLA site were integrated with JLA (then Bluescope Packaging Products) to form Illawarra Packaging Products, with the tinplate component of that closing two years later. That year (2007) saw also the closure of the CRM site – where a little over forty years earlier the first coil had been processed of what had come to be a flagship product for the company – Colourbond steel.

John Lysaght and its descendant firms have been a major employer producing coated steel products in the Illawarra for a little over eighty years. It would be fair to say that much of the credit for that longevity must go to innovation and adaptability, from the design and production of a highly-regarded machine gun to the development of new durable steel products. That of itself must be a positive for the future.  [1]Richards, P. N, Lysaght enterprise : the company, processes, products and people, Port Kembla : Broken Hill Proprietary Company Limited, c1992