Participants at the EUROMETAL Nordics regional meeting in Stockholm are considering the opportunities and challenges, including bigger profit margins, in the development of the region’s market through the course of 2016.
“For us, it’s about increasing margins and focusing on customers’ demands and needs, using a more market-driven approach,” Michael Anderson, md for Scandinavian distribution at Tata Steel, told Steel First on Tuesday April 26.
Tata Steel bought Swedish steelmaker SSAB’s steel service centres (SSCs) in Halmstad, Sweden, and Naantali, Finland, as well as its 50% interest in Norwegian service centre Norsk Stål Tynnplater, in February 2015.
The desire not to lose custom to cheap imports from outside the European markets has triggered a race to maintain market share at the expense of margins, participants said.
The need to move away from a volume-driven market strategy was discussed by many participants at the session, with others advocating the importance of adding value for end-users and tailoring business to the needs of customers.
“This could include digitising our service offering,” one delegate said on the conference sidelines.
“Collaboration across the supply chain needs to come back,” another participant said.
Other topics for discussion included tackling overcapacity in the Nordic region, and the need for consolidation.
Apparent steel consumption in the Nordic region – Denmark, Sweden, Finland and Norway – rose year-on-year to 9.5 million tonnes in 2015, up from 9.2 million tonnes in 2014.
On average, SSCs in the Nordic region reported a profit margin of 1.30% in terms of earnings before interest, taxes, depreciation and amortisation (Ebitda) in 2015, compared with 0.80% in 2014.
Viral Shah, SteelFirst