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Diapositiva 1 - 2nd Steel Plate Conference Europe
Metal Expert Europe Steel conference Stresa, April 28, 2014 Italian distribution squeezed between overcapacity and low margins Speaker: Michele Ciocca Managing Director, Ciocca Lamiere S.p.A. April 28, 2014 Figures tons/ml 2007 2011 2012 11/10 world production that China that Europe 27 that Italy Italy app. consumption that longs that flats total April 28, 2014 1345,4 489,2 209,6 31,9 .. .. .. .. 1526,9 695,5 177,4 28,7 6,8 8,9 2,8 11,3 12/11 1547,8 716,5 169,4 27,2 11/10 38,7 15,1 18,7 33,8 .. .. .. .. 29,8 11,6 15,0 26,6 3,8 5,9 4,2 4,9 2013 1,2 3,1 -4,7 -5,2 13/07 13/12 1607,2 779,0 168,6 24,1 12/11 25,0 9,5 13,3 22,8 -16,2 -17,3 -12,7 -14,7 19,5 3,5 59,2 7,5 -19,6 -1,8 -24,6 -11,7 13/07 13/12 25,2 8,9 13,9 22,8 -34,9 0,6 -41,1 -5,8 -25,7 5,2 -32,5 0,6 Sources: Assofermet Federacciai WS Italian Distribution Flat and long products, carbon steel, stainless and special steel Total flats and longs that carbon steel that stainless and special steel N° companies 540 465 75 N° employees 14.000 11.500 2.500 Turnover €/billions 12,0 9,2 2,8 Mln tons distributed 17,0 16,0 1,0 Source: Assofermet April 28, 2014 ITALY – SSC DISTRIBUTION MAP TORINO CLN ( Cas/Alp ) Ilva Imetals AMDS ( Leini’ ) ICL Metec Savojni Torre Lamiere PMP Moro Nuova Sabel BOLOGNA Sidermed Sid. Emiliana Metaltranciati PARMA P-C ( Fontanellato ) S.Polo Lamiere MODENA Sid. Modenese RAVENNA Marcegaglia Metalsider ALESSANDRIA Albasider Nuova Eletrofer Specialacciai GENOVA Sidergenova MacciòLamiere LIVORNO Etrusca Profilati Siderimport3 FROSINONE Caschera SIENA Sid.Fiorentina 4 TREVISO Veneta Nastri Sid. Tocchet VENEZIA AMDS (Marcon) ROMA Cantarini Errepiesse RIETI AMDS ( Rieti ) PISA Valdera Acciai PADOVA Sid.ca Gabrielli Metalservice Lamiere Tagliate Ilva Commit Sideria Boldrin VICENZA Siderastico Nuova Cosivi Chiminello F.lli FIRENZE Ferlan MASSA TDA VERONA Manni Sid.ca Alberti Lamiere Euroferro UDINE AMDS ( S.Giorgio N.) Sangoi AVELLINO CLN (Atripalda) TSI (AM ) SALERNO Euroflex NAPOLI Sideralba MILANO Ilva Marcora Lampre Generalsider Laminati Metallici Lamina Molteni Nastrofer Ardemagni Origoni Zanoletti SCM Viscontea Ticino Lamiere Metalnastri Euracciai Nafer Italiana Lamiere Milansider MANTOVA Marcegaglia CREMONA Arvedi MONZA AMDS (Monza) Ciocca Lamiere ICLA BERGAMO P-C ( Grassobbio) Comal Ferlatta F.lli Rosa Siderver Steel Sider Siderbergamo BRESCIA SSAB Italia Franchini Lamiere C.S.B. Diversi Euronord Elg Steel LECCO P-C (Civate) P-C ( Oggiono) Eusider Galbiati Zanotta e Galbiati Viganò Verasteel VARESE Nairon PERUGIA Iron Firasid PALERMO Lodetti TERAMO COPAL ANCONA CLN (Osimo) Ex- Adriatica lamiere BARI Centro Acciai Speciali POTENZA CLN (ATELLA) PER SUD PESARO SOCCAM TARANTO Ilva SSC Italian Market evaluation: 2013 SSC market 6,3 million tons 115 SSC 8 SSC m/s close to 55 % 15 SSC 92 SSC m/s close to 25 % m/s close to 20 % Direct mills + 100% mills owned + Minority partnership with mills 5 INDIPENDENT SIZE 50- 300 kt/year INDIPENDENT SIZE 15- 25 kt/year DISTRIBUTION ROLE IN SUPPLY NETWORK STEEL PRODUCERS STANDARDISED PRODUCTION BIG VOLUMES LONG LEAD TIMES UPSTREAM ACTIVITIES: FROM WAREHOUSING TO STEEL ROLLING STEEL DISTRIBUTION INTERMEDIA INTERMEDIATITING NG STEEL STEEL DIST DISTRIBU RIBUTITION ON CUSTOMISED SOLUTIONS FRAGMENTED VOLUMES STEEL END USERS SHORT LEAD TIMES SERVICES PROPOSALS BY DISTRIBUTION HELP CUSTOMERS TO CREATE VALUE HIGH VALUE ADDED PRODUCTS PORTFOLIO RIGHTSIZING IMPROVING PRODUCTIVITY EFFICIENT MARKETING AND SALES INNOVATIVE BUSINESS MODELS CUSTOMERS VALUE CREATION FULL SERVICES SUPPLY CHAIN PERFORMANCE TECHNICAL SUPPORT PROXIMITY LOGISTIC STEEL INTERMEDIATING VALUE CHAIN 11 EU-27 FLAT SSC DISTRIBUTION INTERMEDIATES 54 % OF EU-27 STEEL MARKET SUPPLY NON EU MILLS 13 % EU FLAT SSC DISTRIBUTION 54 % STEEL DEMAND BY END USER SEGMENTS IN EU-27 MARKETS EU MILLS 87 % 46 % SUPPLY SIDE DIRECT DELIVERIES MILLS TO ENDUSERS RESALE INCLUDED INTERMEDIATION 46 % DEMAND SIDE Distribution Overcapacity Situation Before 2008 Macroeconomic scenario Increasing consumption Good profitability Estimated overcapacity: 30% 2009 - 2013 Macroeconomic scenario Consumption 30/40% down and weak recovery Low profitability Estimated overcapacity: 40/50% April 28, 2014 Distribution Overcapacity Defence Small-medium sized companies = flexibility and reactivity Good financial reserve = ability to intervene and reassure financial institutions Strong destocking = April 28, 2014 less circulating capital more liquid assets Distribution Overcapacity Risks and Consequences Worsening of competition Inadequate margins Capital erosion April 28, 2014 Distribution Overcapacity Solutions Distribution rationalization: Excess of fragmentation Excess of overlapping of distribution roles Excess of installed production capacity April 28, 2014 Restructuring but maximum flexibility Supply chain agreements Possible mergers also at distribution level