Market challenges & engineering steels

Transcription

1 Market challenges & GMH s answers in engineering steels Thursday 5 September 2013 Frank Koch Managing Director Sales Marketing Distribution and Logistics Georgsmarienhütte GmbH Germany

2 CONTENT Company introduction Business model Market challenges GMH s answers 2

3 CONTENT Company introduction Business model Market challenges GMH s answers 3

4 KEY FACTS AND FIGURES Manufacturer of quality and engineering steels Market leader in Germany Among Europe s top manufacturers Turnover in mil. Euro Rolled products in to Employees (Annual mean without apprentices) Company introduction 4

5 GMH GROUP OVERVIEW = location in Georgsmarienhütte Company introduction 5

6 RANGE OF PRODUCTS Ingots Crude Steel Billets Steel Bars Bright Bars Weight: 3.5 t to 44 t Molds: square octagonal 16-sided Continuously Cast Material Dimensions: 165 x 165 mm square 240 x 240 mm square Semi-finished steels Dimensions: 70 to 120 mm square 54 to <70 mm square by arrangement Rounds Dimensions: DIN EN Tbl Table 1: 23 to126 mm round Special tolerances (up to ¼DINEN Normal): 23 to126 mm round Bright Bars Dimensions Peeled polished and straightened as per: DIN EN 10278: 20 to125 mm round Peeled polished and straightened Tolerance band h6 and h9 to h12: 20 to125 mm round All major types of heat treatment flaw detection and finishes are available for the above products Company introduction 6

7 CONTENT Company introduction Business model Market challenges GMH s answers 7

8 OUR VISION Business model 8

9 BUSINESS MODEL Our steel drives you forward We supply steel for the powertrain engine transmission steering and chassis components of cars and trucks. Eighty per cent of our products find their end use in the automotive industry. Other customers are the mechanical engineering g and capital goods industries. Commitment to the automotive industry Business model 9

10 TAILORED STEEL Main Applications made from our steel Fracture-split conrod Piston ENGINE Camshaft Crankshaft Common-Rail Injector Nozzle Gear shaft TRANSMISSION Cardan shaft Steering rack Knuckle Wheel hub BEARINGS Ball bearings Business model 10

11 FLUCTUATIONS IN RAW MATERIAL PRICES /t 120 Other Alloys Fe Chrom 70 Fe Molybdän 60 Fe Vanadium Jan 11 Feb 11 Mrz 11 Apr 11 Mai 11 Jun 11 Jul 11 Aug 11 Sep 11 Okt 11 Nov 11 Dez 11 Jan 12 Feb 12 Mrz 12 Apr 12 Mai 12 Jun 12 Jul 12 Aug 12 Sep 12 Okt 12 Nov 12 Dez 12 Jan 13 Feb 13 Mrz 13 Apr 13 Mai 13 /t Nickel /t Fluctuations in raw material prices involve a certain risk in the business model d l Therefore alloy and scrap prices are passed on to the customer via monthly adjusted surcharges which are linked to the development on the relevant markets In agreement with customers and end users Mass alloys Scrap Siliko Mangan 200 Fe Mangan 175 Fe Silizium 150 Jan 11 Feb 11 Mrz 11 Apr 11 Mai 11 Jun 11 Jul 11 Aug 11 Sep 11 Okt 11 Nov 11 Dez 11 Jan 12 Feb 12 Mrz 12 Apr 12 Mai 12 Jun 12 Jul 12 Aug 12 Sep 12 Okt 12 Nov 12 Dez 12 Jan 13 Feb 13 Mrz 13 Apr 13 Mai Business model

12 CONTENT Company introduction Business model Market challenges GMH s answers 12

13 MARKET CHALLENGES I Volatility Future will be rather more than less volatile Changes are mostly non- linear and exogenous (e.g. regulations) Globality Urge and pressure to sell abroad Global supply chains Customs and currency risks Different foreign cultures = Risk in business model Only those who know their situation ti can act and not just react Pace of reaction determines success Active management is needed! Holistic approch: The organisation and its processes must be aligned with this. Market challenges 13

14 MARKET CHALLENGES II: DRIVING FORCES WITHIN THE BRANCHE Threat of new competitors: e.g. steel plants from the BRIC-states Define your USP s Cost pressure increases Pricing pressure increases Bargaining gpower of suppliers: e.g. alloy electricity scrap gas services Intensity of competitive rivalry : e.g. steel plants in Europe Bargaining power of customers: OEMs Forgers Decoupling of raw material and steel prices margin squeeze Threat of substitute products: e.g. carbon aluminium stainless acid and heat- resistant steels electrification of power train low strong Market challenges 14

15 MARKET CHALLENGES III: SHIFT IN AUTOMOTIVE MARKETS Mercosur 6% Russia 5% India 3% China 10% 2008 Ti Triad 56% 34 Mio. Mercosur 7% Russia 4% India 4% 2011 Triad 47% 32 Mio. RoW 18% 2020* RoW 19% RoW 20% Triad 39% Mercosur 7% 589 Mio. 654 Mio. 971 Mio. China 19% Russia 5% Not only direct steel export is relevant in future indirect export (components) will be more decisive Therefore the knowledge of the final applications is crucial India 7% China 24% 38 Mio. Source: VDA Market challenges 15

16 MARKET CHALLENGES IV: SHIFT OF CAPACITIES IN EUROPE Capacity development in Europe: Risk of overcapacity down the whole value chain from steel to the automotive industry Source: IHS Automotive Market challenges 16

17 CONTENT Company introduction Business model Market challenges GMH s answers 17

18 CHANGE IS REQUIRED Change is too often a mechanism of urgency and not of insight The sales and purchase situation in the steel sector is getting ambitious GMH can hardly change the company s environment GMH needs to focus on core competences which differentiate us from competitors (not only the product but the performance!) Learn to be lean! GMH s answers 18

19 GMH TARGET Superior Differentiation with Product Advantage Differentiation with Performance Advantage Relative Differentiation Stuck in the middle Low Cost Advantage Inferiour GMH s answers Inferiour Relative Cost Position Superiour 19

20 FOCUS ON KEY PERFORMANCE INDICATORS Price Technical service Reliability GMH Competition Value Added Performance & flexibility Reputation fast in processing flexible efficient reliable GMH s answers 20

21 KEY SUCCESS FACTOR: COMPETENCE Knowing the production processes of our customers Applications & Components Our Staff must have the relevant know-how of components and applications Customers Markets Robust customer relationships: COMPETENCE Managing relevant market trends: Empower innovation and fascinate customers Use market forces to gain advantages GMH s answers 21

22 STRATEGIC POSITIONING WITHIN THE STEEL SECTOR Ruler in the center GMH s answers 22

23 MAIN POINTS IN GMH S OPERATIVE STRATEGY EFFICIENCY: Cost adjustment and continuous process improvement Promptness in all technical and administrative processes RESTRUCTURING: Increase sales efficiency (sales marketing technical customer support logistics) by combining structural and cultural aspects in a holistic approach INTERNATIONAL FOCUS: Set focus on international growth markets including a new direction within the sales organisation DOWNSTREAM: Increase depth of value added of products through extension of the value chain downstream GMH s answers 23

24 Thank you for your attention! 24