1 / 14

Steel Stockholding in Poland

Steel Stockholding in Poland. October 2008. STEEL STOCKHOLDING IN POLAND AGENDA. The steel industry Polish market The SSC sector Overview … industry structure & top players Growth Foreign competition SSC weaknesses Some ideas …. STEEL STOCKHOLDING IN POLAND. THE STEEL INDUSTRY.

hiroshi
Download Presentation

Steel Stockholding in Poland

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Steel Stockholding in Poland October 2008

  2. STEEL STOCKHOLDING IN POLANDAGENDA • The steel industry • Polish market • The SSC sector • Overview … industry structure & top players • Growth • Foreign competition • SSC weaknesses • Some ideas …

  3. STEEL STOCKHOLDING IN POLAND THE STEEL INDUSTRY

  4. THE INDUSTRYPOLISH STEEL MARKET - Overview • The Polish steel market in 2006 amounted to ~10.3 mt finished steel products • The Polish steel market is therefore just a little smaller than the steel market in the UK [2006 apparent demand ~12.9 mt†] although the Polish population is significantly smaller†† • Poland 38.1 million • UK 60.5 million • Recently, Polish steel demand is growing fast • 2006 demand was ~28% up on 2005 • 2007 demand [based on H1 2007 data] is estimated at ~12mt • 2007 consumption will be ~17% up on 2006 †:Source: IISI ††:Source: Population Reference Bureau, mid-2006 estimates

  5. Consumption CAGR 1997-2006 amounted to ~6% per annum THE INDUSTRYPOLISH STEEL MARKET - Statistics† †:Net production includes correction for double-counting of downstream use. Tube data includes closed hollow sections. For more detailed 2006 or later market appraisal, contact MCI [see page 14]

  6. THE INDUSTRYPOLISH STEEL MARKET – Geography of demand • Analysis based on Customs & Excise purchase declarations covering 64% of demand only • Analysis shows end use demand (irrespective of purchase intermediaries†) • The full analysis by product and region is shown in Appendix 2 †:Stockholder purchases e.g. in Slask sold on to an end-user e.g. in Malopole are thus reflected above as demand in Malopole

  7. Analysis is shown for full year 2006 data THE INDUSTRYPOLISH STEEL MARKET – Routes to market Domestic production 4875 kt Imported production 5396 kt Intermediaries 1875 kt Direct 3000 kt Intermediaries 2167 kt † Direct 3229 kt Total finished steel purchases in Polish marketplace ~10271 kt of which ~4042 kt pass through intermediaries †:Of this volume, ~1598 kt was flat products, ~311 kt was long and ~258 kt was tube. Semis route to market (mostly MSP Dabrowa Gornicza) is almost completely 100% direct.

  8. STEEL STOCKHOLDING IN POLAND SSC SECTOR

  9. SSC SECTOROVERVIEW - Industry structure† • Currently ~100 ‘players’ with gradually diminishing distinction between the ‘stockholder’ and the ‘service centre’ • Across the 100 firms, multiple sites [especially for larger sites] mean that across Poland as a whole there are perhaps ~250 locations where customers may purchase steel / get access to simple mechanical services such as cutting † † Tier 1: Top 5 Sales: 1.6 mt Avg: 325 kt/yr Sales: 1.4 mt Tier 2: Next 10 Avg: 140 kt/yr Sales: 1mt Tier 3: Other ~85 Avg: ~9 kt/yr Total: ~100 firms with sales ~4 mt/yr †: All figures are MCI estimates. In terms of approx. number of locations, broad MCI assessment is that Tier 1 firms have ~80 depots [Grupa Polska Stal dominating with ~44], Tier 2 firms have ~70 depots [incl Stalexport, Stalprodukt with 15 each] and Tier 3 firms ~100 depots. ††: Figures of 100 and 250 are estimates covering PUDS member firms only. A handful of non-PUDS members may also exist, with another ~10 depots (possibly more) – these other firms are however excluded from analysis above.

  10. SSC SECTOROVERVIEW - Top Players† By steel tonnage †: Source: PUDS 2006 rankings [Polska Unia Dystrybutorow Stali; www.puds.pl ]. Note that estimates above may contain some degree of double counting (possibly ~5-10% or even more in the case of Grupa Polska Stal) because of inter-company sales and reprocessing of processed material. Figures above also include exports where these arise.

  11. SSC SECTORGROWTH PROSPECTS – Market demand • Polish steel market has been growing fast. MCI assess that a pause in growth will be probable in 2008, but that subsequent moderate demand growth will continue • Current West European steel demand is ~412 kg/capita. In Poland it amounts to ~270 kg/capita • If half this difference was eliminated in 5 years, Polish demand intensity would increase to ~340 kg/capita, predicting overall steel demand of 12.8mt by 2012† • With steel deliveries via intermediaries maintained at ~40%, total SSC mediated sales would rise from ~4mt in 2006 to 5.1mt in 2012 MCI predict Polish SSC sector growth of ~4% per annum to 2012 †: This is probably a conservative estimate. EU structural funds driving construction sector growth, plus continuing foreign investment in steel consuming sectors / applications could means much higher steel demand in the medium term

  12. SSC SECTORCOMPETITION – Recent events summary • Events of last three years can be summarised in terms of • The move away from the highly fragmented industry structure of the late 1990s • Merger and consolidation, with Zlomrex leading the field • Much foreign investment [even by traditionally very risk averse firms] • In sectors/applications: including auto, white goods, construction, roofing • In high value steels including alloy, stainless • In product specific SSCs [heavy plate, coated steels, rebar] • Broadly, in keeping up with needs of Western investors • Since 2005, we are witnessing much reorientation of the typical ‘Polish steel depot’ as follows: From competition back to oligopoly? Growing competition? Stockholder Stockholder + Service Centre

  13. SSC SECTORWEAKNESSES – MCI appraisal • Number of players at 250+ suggests that high competition, poor margins and small average size [sales under 10kt/year] are likely to be key weaknesses • Know-how in terms of sophisticated add-on services / advanced customer needs is also judged by MCI to often be problematical • Market understanding also is likely to be: • Often limited; • Typically highly local; • Typically lacking broader / international perspective • Access to capital considered to be a significant weakness for many smaller operators These matters potentially define quite a strong opportunity for industry investors

  14. SSC SECTORSOME IDEAS … • Can MCI help you develop your presence in the Polish steel sector? • Can we provide an update of the slides above? • Further detailed or regional analysis? • Polish customer assessments? • Review or optimisation of your entry strategy? • Some introductions? Please contact: Andrzej M Kotas, Managing Director, MCI Email: mci@steelonthenet.com Mobile: +44 (0) 775 149 0885

More Related