Ferrous and non-ferrous metals

Metal prices and demand for ferrous and non-ferrous metals declined drastically in 2008, in some cases by as much as 50%. The last two years have seen increasingly positive developments. But the industry is now facing new challenges relating to the volatility of the commodity market, caused by increasing demand from emerging markets such as China and Brazil and the high level of supplier concentration and protectionism.

The most recent change in the iron ore pricing mechanism (from a yearly to a quarterly basis) and the increase in the price of coking coal are two typical examples that have led to increased volatility. Combined with slow recovery in demand for metal products and overcapacity in Europe, pressure on fixed costs remains high. Moreover, high energy costs and government regulation of energy-intensive companies present additional obstacles.

In response we have seen restructuring programs in the industry, involving capacity adjustments, cost reductions and performance improvements. Players are forced to decrease their processing times, leading to increased complexity and risk. At the same time, disproportionate growth in demand for metal products in emerging markets is creating new sales opportunities, while emerging producers and suppliers from countries rich in natural resources or raw materials are increasingly entering the global market.

We develop strategic approaches for suppliers and consumers of ferrous and non-ferrous metals and the related manufacturing industries. We support our clients by developing restructuring programs and complexity management strategies. We also help them exploit levers for reducing the cost base, improving purchasing and supply chain management, and professionalizing their global footprint.

Furthermore, we support growth and sales-up initiatives by developing market entry and M&A strategies, finding potential partners for strategic alliances, coordinating product portfolios, developing new business models and setting up a professional sales and service organization.

Devising a diversification strategy

An international steel company was seeking ways to deal better with strong market fluctuation in its core business. Cooperating closely with the management board, we developed a suitable diversification strategy and identified market segments close to the core business. This enabled the company to exploit synergies and scale effects. The board approved our strategy and implementation began without further ado.

Optimizing a production network

A leading global producer of long steel products was struggling with high manufacturing costs, long production cycles and capacity bottlenecks. First, our team identified weaknesses in the production network and devised a detailed technical blueprint that showed the required technical improvements. Next, we calculated the positive financial effects of these actions and laid them out in a business plan. Within two years, the company had implemented all our recommendations in full.

Developing a market entry strategy

One of the world's leading producers of quality flat steel wanted to expand into the pipe segment. We analyzed the market in detail for our client and developed a promising market entry strategy. Finally, we developed a detailed technical concept for a production facility to be integrated seamlessly into the existing production sites. To this end, we defined the facility layout, planned future material flows and created a detailed business plan. The company is now in the process of implementing our concept.