regenboog schreef op 21 oktober 2015 15:58:
Steel — a sector being driven to transform 2015-2016
The outlook for the global economy is mostly positive with growth picking up in the US, India and Southeast Asia, while several emerging markets are experiencing a deceleration in growth. However, the structural shift in the transitioning Chinese economy could cap this momentum.
Countries and businesses are becoming increasingly interdependent through trade, investment and financial systems across the world.
The risks and opportunities in the steel business are getting larger in scale and impact, with their sources becoming more diverse and global.
Real growth is in being a truly international player
EY - Real growth is in being a truly international player
To survive and thrive, in a sector in constant transition, steelmakers need to transform themselves.
Globalization is no longer a matter of choice; steel businesses’ long-term success depends on it.
The businesses that ride the next wave of growth will be those that understand the trends and refine their strategies, business models and portfolios according to a truly global mindset.
The steel producers must find the right balance between globalization and customization.
Opportunity to embrace globalization
While the Chinese steel sector turns introspective over the next decade to deal with its excess capacity, pollution, low market concentration and lack of profitability, this is the window of opportunity to build competitive advantage now before supersized, more efficient Chinese steelmakers emerge in the global market.
Steel companies that embrace globalization (in their strategy, supply chains, knowledge and information, processes, talent and financial flows) while balancing with customization (of their products, marketing, stakeholder relationships) will emerge as sector leaders in the long term.
Drivers of globalization
Below are some of the key drivers of globalization that are putting increasing pressure on the steel sector. Pressure to globalize will drive the need for stronger global policy coordination among nations and resilient supply chains for companies operating in this environment.
EY - Drivers of globalization
Key transformation themes for the sector
To succeed and become more competitive in this dynamic environment, steel companies need to focus on four critical themes:
Rationalize excess capacity
Increase market and product concentration
Increase market competitiveness
Embrace digital
Global strategy, local execution
While the global outlook for steel is mildly positive as there are increasing signs of momentum in some parts of the world, there are still risks to global growth and a number of these evolve around China.
There is no consensus on whether China has reached peak steel consumption. The persistent rise in urbanization will continue to boost steel demand. The pressure to preserve provincial employment and tax revenues will delay the overall capacity rationalization for years to come, while product mix undergoes change.