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Value Creation Strategies

Value Creation Strategies

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Published by Patti Malabanan

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Published by: Patti Malabanan on Jan 25, 2011
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Value Creation Strategies for the Steel Industry essentially looks at the forecasted demand and supply of steel

, the value chain, future trends and company strategies. It describes the opportunities and potential constraints for steel companies to create additional value by taking advantage of the 'downstream space' between the rolling mills on one hand, to the construction assembly lines on the other. Steel industry consolidation (at least at some regional levels) has almost run its course. There will be further acquisitions of independent mills but the large-scale consolidation within regions has now reached the point where monopoly considerations have started to become more important. It is for this reason that the focus on steel producer value creation strategies in this report are geared towards the vitally important construction industries. This study was conducted over sixmonths and provides a unique, detailed and completely independent report into steelmaker profitability over the next 10 years. The report also provides by-company information on business strategy, future trends and opportunities for companies such as Mittal, BlueScope, Ruukki, Tata-Corus, Nucor and Badische Stahlwerke. Case studies are also used throughout this report. Key construction products/services covered include: commodity rebars, hot rolled structural steels, galvanised/colour-coated roofing and cladding panels, sandwich panels, light-weight cold formed sections, hollow sections; steel erectors, reinforcement fabricators; building element systems (floor/roofing systems, cladding systems); preengineered and pre-fabricated buildings.

the varying profit margin mark-ups currently available between ex-works and delivered prices for commodity structural steels, but also explores the 'downstream space' of creating additional value by: (a) the participation of downstream manufacturing processes; (b) the transformation or design and erection of construction products and building components and (c) the move towards distribution and services. This part aims to address the following key issues: • • • What is the role of stockists, service centres and distributors in the construction value chain? What are the lessons being learnt for the future marketing of construction steels to regional construction markets? Which marketing and R&D programmes should steelmakers invest in to best capture the price margin benefits of the construction steels value chain? What are the key challenges facing steel producers over the next 5-10 years in meeting the future construction steels demand from project developers, architects, engineers, regulators, controllers, inspectors, manufacturers, specialists and contractors. What are the long term demand/supply and pricing trends for construction steels over the next 10 years by major construction products? Where and how should future steel producers market themselves to the global construction steel market? What will all this mean to price volatility for construction steels? What role could steel futures have in construction contract pricing? How is steel industry investment in promoting structural steels usage, actually working to influence current and future global demand trends relative to competitor materials such as aluminium and concrete? What lessons can be learnt from downstream strategies being adopted by companies such as BlueScope Steel, NUCOR and Ruukki in capturing value in construction steels? What are the winning strategies one should adopt to add value in construction steel products over the next 5-10 years?

• • •

Part 2: Construction Steel A common problem faced by steel executives is that they have traditionally been removed from the decisions made by end-users in terms of the types of construction materials to be used. However, the global construction market trend is for more off-site manufacturing, more outsourcing of assembly processes and the introduction of pre-engineered and prefabricated buildings as the ultimate step in the process. This report explores the strategies that work best to achieve this. The aim of the report is not only to expose

scrap.- How long will the steel and raw material price boom continue for? Is the global steel industry steel poised for sustained profitability? Will there be an impending steel crisis in China’s domestic market? To what degree will the global credit crunch affect global steel consumption? What are the trends for regional consumption by production route. coke and freight heading? - - - - - - . and a longer term outlook to 2020? Which steel end-user sectors are growing and which are declining? Where are prices for iron ore. consumption per capita and steel intensity forecasts for the medium term period to 2012. coking coal.

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