How to Get the Most from Steel Industry Management Consultants

 

Introduction
In today’s rapidly evolving steel sector, partnering with steel industry management consultants can provide significant competitive advantages. From operational efficiency to strategic growth, expert consulting offers unique insights that are hard to achieve in-house. But how do you ensure you're getting the most out of your collaboration with steel consultants? In this article, we explore actionable tips and strategies for maximizing the benefits of working with these industry experts.

For top-notch consulting services, explore the offerings at Metals Consulting International.

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1. Why Hire Steel Industry Management Consultants?

Steel industry consultants bring specialized knowledge and deep market insights, which can greatly enhance operational decision-making. Whether you're seeking improvements in production processes, supply chain management, or cost optimization, partnering with experts allows you to tap into the latest technologies, methodologies, and best practices.

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2. Key Areas Steel Consultants Can Help With

When you work with steel industry consultants, you’re not just hiring general business experts. These professionals specialize in:

• Operational Efficiency: Optimizing steel production workflows.
• Supply Chain Management: Streamlining procurement and logistics.
• Cost Control: Reducing raw material and labor costs.
• Market Analysis: Providing up-to-date market trends and pricing forecasts.

To get tailored advice, consider visiting Metals Consulting International.

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3. How to Choose the Right Steel Consulting Firm

Not all steel management consulting firms are created equal. It’s important to evaluate potential partners based on:

• Experience: Choose firms with a proven track record in the steel sector.
• Customization: Look for consultants who offer solutions tailored to your specific challenges.
• Data-Driven Approach: Firms that utilize the latest data and market analysis tools can help your business stay ahead of the competition.

MCI offers decades of industry experience and customized solutions for businesses of all sizes. Learn more - check out the MCI brochure.

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4. Maximizing ROI with Steel Industry Consultants

To get the most value from steel industry management consultants, consider the following strategies:

• Set Clear Objectives: Before engaging with a consulting firm, outline what you hope to achieve.
• Engage Regularly: Keep communication lines open and ensure regular updates on project milestones.
• Implement Recommendations Quickly: Ensure your team is ready to implement changes recommended by consultants.

The team at MCI is equipped to help you through every stage of the consulting process, ensuring that you achieve measurable results.Visit Metals Consulting International to learn more.

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Conclusion: Transform Your Business with Steel Industry Experts

Steel industry management consultants offer more than just advice; they can transform your operations, boost profitability, and ensure long-term success. By choosing the right consultants and actively engaging with their recommendations, you can unlock new opportunities in this competitive market.

Looking for trusted consulting services? Email us at info@metalsconsultinginternational.com or call _+44 775 149 0885.

Tata Steel Port Talbot - the road to viability

We have previously discussed in this blog some of the issues surrounding the future of Port Talbot in south Wales. Below, I outline our own views of the way ahead for steelmaking in south Wales – as seen by the experts at Metals Consulting International Ltd.

The problem

The biggest problem at present is that Port Talbot is reportedly losing somewhere between GBP £0.5 million - £1 million per day. With production of finished steel products at Port Talbot of the order of 3 million tonnes / year, this translates (assuming losses of just £0.5m per day) into a loss of ~£60/tonne. With weak balance sheets across the steel industry pretty much worldwide, few steel companies today are able to sustain loss-making at this level for very long.

Suggestions for business turnaround

In recent weeks, a number of apparent solutions for the turnaround of Port Talbot have been mentioned in the international press. These include business rate reductions, employment cost reductions and even reductions in energy costs. Let us examine these ideas in turn.

(i) Business rate reductions

Many industry commentators note the cripplingly high business rates that sometimes apply in the UK. Port Talbot currently pays ~£10m/year in business rates. On a sales volume of ~3 million tonnes, this cost amounts to roughly £3 / tonne. If the objective is to improve profitability by £60/tonne, it is clear that substantial reductions of business rates will do little to restore viability at Port Talbot.

(ii) Employment cost reductions

Port Talbot employs a labour force of ~4000. If we assume an average wage of £25,000/year per employee, this gives a total wage bill of £100 million per annum or roughly £33/tonne. Trimming this by 10% could therefore reduce Port Talbot’s production costs by ~£3/tonne. If the objective is to improve Port Talbot profitability by £60/tonne, trimming the wage bill by a few percentage points will also do very little to restore viability to the business.

(iii) Energy cost reductions

There is much discussion concerning the relative cost of electricity prices in the UK as compared to the continent; many observers consider that electricity costs in the UK are double those in other parts of Europe. Depending a little on the exact steel product, our own assessment is that Port Talbot’s electricity costs are currently in the £12.50-£17.50 / tonne range.  If we ignore the fact that much of this electricity can be generated from hot gas that is generated from carbon-based inputs such as coal and coke, and further assume an average electricity cost of £15/tonne of finished steel, it is clear that whilst halving of these costs might save ~£7.50 per tonne, this level of cost saving is also very far from the profit improvement target of £60/t discussed above.

The solution

What then is the solution for Port Talbot if the objective is a profit improvement of £60/tonne, when measures such as business rate reductions, employment cost reductions and reductions in electricity costs can at most generate savings of £3, £3.50 and £7.50/tonne respectively (or just £14/tonne in total)?

MCI’s view is that the only solution is to stop production of liquid steel in south Wales, and to ship in steel slab (for further downstream processing into hot and cold rolled and coated steel at Port Talbot) from one of the lowest-cost producers of these steels.

The chart below illustrates Port Talbot’s slab production costs on the world cost curve, as at Q1 2016.

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Readers of this blog post will notice that the difference in slab production cost between the world’s lowest cost producer and the Port Talbot works is ~$110/tonne. If we assume a transport cost via sea freight of ~$35/tonne, the total cost saving at Port Talbot of purchasing rather than making slab works out at $75/tonne or ~£52 / tonne. With some small reduction in business rates or employment costs or energy prices, Port Talbot should therefore be able to achieve a profit improvement of £60/tonne and thus attain viability, if it can source low cost slab.

Next steps  

Do we have any other evidence that such a strategy would be viable for Port Talbot? Who would be the best foreign partners for sourcing the low-cost slab (and do they have the capability for immediate slab supply)? How do we calculate the production cost savings and freight costs?

For further information, please contact us.

Andrzej M Kotas

Managing Director

Metals Consulting International Limited

Website: www.steelonthenet.com

Mobile: +44 775 149 0885

      

Andrzej M Kotas - LinkedIn profile

In case it is of interest, you can see my LinkedIn profile (including some of the previous roles I have had in the steel sector) at http://uk.linkedin.com/in/kotas

Regards.

Andrzej M Kotas, MBA

Managing Director

Metals Consulting International Limited

Website: www.steelonthenet.com