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