COMMENTARY — Making Brunswick more competitive

— From a speech by John Carrington, outgoing president of Brunswick Mining and Smelting, at the company’s annual meeting:

By many standards, Brunswick Mining and Smelting is straightforward and uncomplicated. We operate four industrial plants and make products which are basic commodities for other downstream users: concentrates, lead metal and fertilizer. Our job is to make these products meet or exceed our customers’ expectations in a way that will provide a superior return for our shareholders. How have we been doing?

We have brought stability and consistency to our production rates and can now count on them all the time. We have improved the quality of our products and are continually doing so. We have reduced our costs of production substantially. We can now count on revenue and cost improvements to carry us to the bottom line more or less intact, without being absorbed by expense factors.

Finding market niches in the commodity business is like looking for the proverbial needle in the haystack. By its very definition, a commodity product is not differentiable — meaning that, for instance, our lead metal is just as good as our competitors’. Our goal is to become our customers’ preferred supplier. We have already made good progress with one zinc refinery and some of our lead customers, but there is much more to do. I have talked for three years about improving our competitive position — and we have. The Brunswick mine cents in the Bathurst area of New Brunswick] is in the lower half of the cost curve of world zinc concentrate producers, and our lead smelter is more than holding its own. All of this makes a positive contribution to our bottom line at a time when few primary lead smelters around the world are doing the same.

During the next three years, Brunswick will attempt to reduce waste generation at its operations by 20% in selected areas. Our target list includes reducing waste dilution of ore in our mining process, and improving the quality of our concentrates by removing undesirable elements, making them more desirable to our customers. Other endeavors include introducing more automated equipment at the Brunswick mine, upgrading the skills of our employees in the use and maintenance of such equipment, and seeking more “single-sourcing” partnerships with our suppliers to provide Brunswick with superior goods and services at the most competitive prices . . .