Dimensionamiento del secador

In the end of the 19th century, the ownership of mines, ships, foundries, rolling mills and fabricating plants was necessary for steel companies to reduce costs and improve productivity (Harrigan, 1984). In the first half of the century, economies of scale in the steel industry were so strong that small-sized firms were wiped out (Robertson, 1995, p. 546). Pressures of the First World War brought in 1918 the formation of the National Federation of Iron and Steel Manufacturers, existing out of 40 associations and 400 companies. This was a way for the government to cope with the diversity in the industry and have control. The Federation seemed to be inadequate when the strategic industry dominated the European scene. Therefore, and as a consequence of substantial tariff protection in the British industry, a stronger central association was formed under the name British Iron and Steel Federation (BISF). After the war the Federation re-emerged with a development plan. This resulted in a remained foundation, but with quite small-sized, often local associations (Blakey). A growth in steel production after the Second World War was followed by a long lasting crisis with lower demand, overcapacity and low profitability. The focus changed into technology and cost reduction. Instead of pro-activity and solution thinking, reactivity and product thinking became important. There was a limited knowledge of customers, downstream supply chains and not much differentiation strategies. During the nineties, state-owned enterprises became private which started the consolidation of the European Steel Industry (Vermeij). Companies started to invest in R&D, capacity management and new business models to optimise the stakeholder and customer value (Vermeij, Eurofer2). In line with this consolidation wave, the last major merger was Tata Steels acquisition of Corus3 in April 2007 (EEF). The process of consolidation has been accompanied by increased integration in the global market. Steel companies moved from a national base to a European-wide base and even further more outside Europe (European Commission, 2008). But, this also caused European companies to move their manufacturing operations eastward or to start import from China (EEF). The European steel market is a mature market (OECD, 2008).

Eurofer is the European Confederation of Iron and Steel Industries

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The apparent consumption of steel in the European market rose with 3,6 %, including mill deliveries to stockholders. The real consumption of steel in the European market, i.e. the stockholder deliveries to the market, raised with 5,3% (figure 3.5). This reflects buoyant construction and engineering activities (EEF), which are the two main drivers of steel consumption (Eurofer, 2007, Annual Report 2006). In figure 3.6 the world production divided per region is represented, which shows the increasing production of China.

Figure 3.5: World Crude Steel Production 1993-2007.

Source: EEFF

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Competition

Due to the high capital requirements and the consolidation of the steel industry, large companies tend to dominate the market, especially in the case of flat rolled steel products. There is a high degree of competitiveness (European Commission, 2008), traditionally based on price which makes the price a key of consumers buying decisions (Robson Rhodes, 1999; McAdam and Brown, 2001, p. 87). Although in reality, the price seems to count more in the beginning of the supply chain, where the steel is produced and large quantities are purchased. Differentiation is difficult and several theories underline that firms in the supply chain are looking to add value by improving customer service (Potter et.al, 2004). Schrorsch (1994) emphasizes that firms seem to focus more on the needs of the plant, while the real driver of competition and more usage of steel is the ability to serve the customer better than others. Vermeij agrees with this driver of competition and explains that nowadays a company in the steel industry needs distinctive competences and should focus on technology. They have to make choices leading to a more differentiated market. Value creation is becoming the

mainstay and the supplier-customer relationship has changed into a partnership to provide total satisfaction instead of only selling products. Value can be created by services, product mix, quality and logistics. One of the challenges for the first decade of the 21st century is to deal with globalisation and the consolidation at all levels in the value chain. Generally, the deeper down the chain, the more opportunity there is for value added selling (Vermeij, Eurofer).

Customers

Segmenting the customer market of steel should be based on key buying factors. These are customer-specific rankings of the multiple factors that shape buying decisions. The three segmented markets defined by Schrorsch (1994) are; price-sensitive customers, service customers and commitment-focused customers. Price-sensitive buyers are primarily concerned with costs and less with the quality of their purchases. Usually, steel represents a major portion of their total costs. Commitment focused customers value close, longstanding relationships through which superior steel applications can be developed and employed in their own products and processes. Service customers require the highest levels of quality and delivery performance. Price is secondary both to security of supply and to performance. Steel represents only a relatively small part of their total costs (Schrorsch, 1994, p. 114).