market development out of our comfort zone RICHARD MATHESON

Transcription

1 market development out of our comfort zone RICHARD MATHESON

2 Australian market conditions No native stainless steel production Stainless steel needs are met through distributors and service centres Open economy, virtually no protection, anti-dumping or non tariff barrier constraints Modest population (approx 22.8 million) Good skills but high labour costs relative to those in our region Productivity growth stagnant for last 5 years Historically vibrant and growing stainless steel consumption through some new applications and exploiting applications developed elsewhere

3 Australian market conditions Pre 2009 market 130,000tpa Currently approx 100,000tpa 2-speed economy is evident A$ pushed higher by resources sector and commodity prices (US$1.02) Pressure on manufacturing sector across the board Resources sector determination to buy offshore There will be upsides

4 Australian market conditions Unpopular federal government with slim majority Introduction of new Carbon Tax Some reluctance to invest poor confidence Manufacturing Tourism Others However, reportedly we have the strongest mature western economy

5 development of AU$ exchange rate

6 stainless steel sector Stainless sector has declined in volume Large production line manufacturing has been vulnerable Most train manufacture White goods Anything that can fit into a container

7 movement offshore Why are my brand new 3CR12 coal wagons arriving on the ship rusty? 20 years of development, experience and investment Approx. 15,000 t annual market in Australia

8 how we have lost the opportunity #N/A Tonnes / Month 2, ,000 1,500 1, Month Average for Quarter

9 Australia Development of Apparent Consumption 140, , ,000 80,000 60,000 40,000 20,000 0 Imports Exports Apparent Consumption

10 Australian stainless market conditions Supply side of the business appears to be rationalised Remaining profitable fabrication moving into niche applications and customers often with an international focus Ronstan Stoddart

11 example of niche strategy Ronstan International Established Design Construct arm for the architectural industry Attempt to control the buying decisions on componentry Now a successful strategy working in Australia and abroad

12 example of niche strategy Stoddart Manufacturing From contracting to developing production line manufacture of commercial kitchen appliances and equipment Value-add is in the intellectual property Export is now evident

13 ASSDA Co-operative association of 220 organisations Growing the stainless steel market by making it easy to use Education, accreditation, promotion, technical services and problem solving, advocacy and now a consulting capacity Defend the industry at government and regulatory level KEY ACTIVTIES Persuade potential customers to accurately use stainless steel Increase number of satisfied customers for locally supplied stainless products Defend the investment in and future of the industry

14 industry benefits Promotion Networking Problem solving Education Accreditation Advocacy/information Greater efficiency; higher quality OTHER SERVICES Technical help and problem solving Annual conference Industry sector projects (eg water, food) Standards Consulting advice for projects

15 new applications Sustainability Life cycle cost analysis

16 Pittsburgh Convention Centre The only meeting venue with Gold LEED Certification Stainless steel 316 roof 16

17 lessons from market development give me the building, not just the hand rail Whole-of-life study with Gold Coast City Council 750,000 people and 14,000 km 2 of coastal environment Various stainless steels examined, competing with galvanising, paint and duplex coating systems on carbon steel Result default material of construction for buildings with a design life greater than 19 years is stainless steel Most material being used is currently 11% Ni 316, but there will probably be applications for a number of families and grades

18 lessons on market development give me the building, not just the hand rail

19 lessons on market development construction sector

20 Comparative Amounts of Materials Low carbon footprint for Stainless steel Concrete LDX2101 Adjusted wall volume (m 3 /m) Qty of concrete (t/m) Qty of rebar/ldx (t/m) Total material (t/m)

21 accreditation Part of an organised industry that helps ensure ease of use and quality outcomes Greater certainty for specifiers and purchasers and a database of quality suppliers Promotes best practice fabricators and differentiates them at the negotiating table Sets a high standard of quality in the industry for others to meet Fabricators commit to ongoing training and development The system forms a contract between ASSDA and the fabricator binding for details and ethics Gives the fabricator ASSDA s technical strength so they can solve problems with confidence

22 what s the potential? Desalination LNG Minerals and energy

23 what s the potential? Source: Access economics

24 how do we exploit the opportunity? Active participation in the project delivery process - early on (design stage) Give designers confidence in technical specification - use ASSDA s strength of technical know-how in Corrosion Resistant Alloys Build positive relationships Mitigate competitive advantage from off-shore designers

25 two stream approach Corrosion Resistant Alloy Excellence Program Consulting firm engaging with designers and project proponents at design stage (PFS or FEL1) or elsewhere to secure better outcomes for the project and facilitate engage with the supply chain Advocacy Improve the transparency of project delivery to ensure the opportunity to supply arises in the project delivery process Government engagement in licencing and conditioning major private sector projects

26 sometimes it gets exciting

27 importance of market development Provides access and defense, confidence and growth Reduces failure Establishes a standard of advice, education, organisation Acts for commodity materials and important groups where individual firms cannot When the chips are down the members have contributed

28 Thank you Helping us to grow your business and grow the market for stainless steel.