Wirtschaftsverband Stahl und Metallverarbeitung e'V'

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Wirtschaftsverband Stahl-und Metallverarbeitung
e.V.
Dipl.-Ing. Ulrich Galladé President Innovations
in the steel and metal processing industry
Challenges for medium sized companies and the
entire value chain   METEC InSteelCon
2007 Düsseldorf, June 12, 2007
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Contents

• Innovations in the steel and metal processing
  industry
• Challenges for medium sized companies and the
  entire
• value chain
• 1. WSM
• 2. SMEs in Steel Processing Supply Chain
• 3. Innovations
• 4. Conclusions

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1. WSM Market Data

• Steel and Metal Processing in Germany
• 4.600 Companies
• Family owned Business
• 410.000 Employees
• 72 bn. Turnover
• 24 Associations

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1. WSM Supply Chain

• Semi-finished Products and Components
• End-Products
• Industrial Service and Treatment
• www.wsm-net.de

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1. WSM - Diversity

• e.g. Cold Forging, Cold roll forming, Steel Wire,
  Iron Wire, Plates, Sheets, Strip Metal, Cold
  drawn steel, sections
• e.g. Fasteners, Chains, Springs, Gates, Wire
  Products, Tanks, Vessels, Sheet metal working,
  pressed and drawn parts, Powder Metallurgy, tubes
• e.g. Surface-, Heat-, Hardening- or Mechanical-
  Treatment

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1. WSM - Core Characteristics

• Steel and Metal Processing
• Material Costs up to 60 and above
• Medium-sized Companies
• Market Pressure
• by Supplyers and by Customers
• Sandwich-Position
• Politics in favour of SMEs
• e.g. Innovation Policy for SMEs, International
  Accounting for SMEs, Energy Policy, Tax Policy,
  Competition Policy

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1. WSM - Key Data
Companies in Steel and Metal Processing
5.000
4.800
4.600
4.400
4.200
4.000
3.800
3.600
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
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WSM Wirtschaftsverband
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1. WSM - Key Data
Employees in Steel and Metal Processing
420.000
410.000
400.000
390.000
380.000
370.000
360.000
350.000
340.000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
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WSM Wirtschaftsverband
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1. WSM - Key Data
Turnover in Steel and Metal Processing
Tsd.
80.000.000
70.000.000
60.000.000
50.000.000
Ausland
40.000.000
30.000.000
Inland
20.000.000
10.000.000
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
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WSM Wirtschaftsverband
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2. SMEs in Steel Processing Supply Chain

• EU-Definition of SMEs
• 250 employees per company
• 50 million turnover per company per year
• Steel and Metal Processing in Germany
• 100 employees per company (average)
• 15,6 million turnover per company per year
  (average)
• Family owned business culture

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2. SMEs in Steel Processing Supply Chain

• Market Pressure
• Steel Industry as a Supplier
• highly concentrated in Germany and in Europe
• Automotive Industry as an important Customer
• highly concentrated in Germany and in Europe
• High horizontal Competition
• from inside Europe and from outside Europe,
• especially from low cost countries

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2. SMEs in Steel Processing Supply Chain

• Challenges for SMEs in the supply chain
• Differentiation from competitors -
• Excellence in price, in quality, in service
• Cost-Efficiency
• Attractive for young academics and skilled
  personnel
• Global supply chain management

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3. Innovations

• SMEs meet many challenges by Innovation
• Innovations and sustainable quality are means of
  differentiation, esp. from producers from low
  cost countries
• See examples from WSM-publication
• Innovations Values - Growth, 2006
• Innovations in steel quality and in production
  process may also reduce costs significantly
• Innovations attract young academics and skilled
  personell

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3. Innovations

• Structures of Innovation in Steel and Metal
  processing
• Hardly ever RD-results from an SMEs own
  research department only
• Cooperation Vertical (with Supply Chain
  partners)
• Cooperation Horizontal (WSM FSV / GAK)
• Cooperation with Universities and Research Labs
• Exchange of talented Academics / Networks
• Role of RD Funds (WSM et al. AVIF) / RD
  State Aid

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3. Innovations

• Shortcomings of Innovation in Steel and Metal
  processing
• Lack of political incentives for transfer of
  technology
• Lack of Engineers
• Lack of Financial Ressources
• - equity ratio often too low
• - own innovation not booked as an asset in
  ballance sheets
• - revenues often do not cover costs sufficiently
• - customers often do not pay for innovation and
  know-how separately
• Lack of effectiveness in RD-financial support
  (bureaucracy)

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3. Innovations

• Improving Innovation in Steel and Metal
  processing
• Steel and Metal processing must be advertised by
  the whole supply chain as innovative in order
  to attract young academics
• - Suppliers must focus on down stream customers
  demands
• - Customers must pay adequate prices for
  innovations / know-how
• Government should give better incentives for
  better transfer of technology to more flexible
  SMEs
• - Freedom and Competition for Universities /
  Research Labs
• - Forschungsprämie program extension for
  horizontal research cooperations of SMEs
• - Develop concept of Universities and Research
  Labs as non-profit scientific service
• providers
• Procedures for RD-financial support must be
  better tailored for SMEs and should be less
  bureaucratic

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4. Conclusions

• Steel and Metal processing is an innovative
  sector, characterised by SMEs
• Innovation is a challenge for the entire Supply /
  Value Chain
• Concerted advertisement for innovations in
  networks
• Fair pricing
• Focus on Down Stream Demands
• Better Regulation Government must focus on
  transfer of technology

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Wirtschaftsverband Stahl-und Metallverarbeitung
e.V.
Dipl.-Ing. Ulrich Galladé President Thank you
for your attention!   METEC InSteelCon
2007 Düsseldorf, June 12, 2007