Long-term success of steel companies would be determined by investment in raw material security, capital project management, customer centric measures, a study by consulting firm Accenture shows.
The study also laid emphasis on building differentiated supply chains and securing human capital for the success of steel business.
The firm recently released the research titled ”The “New Normal” in the Indian Steel Industry: Achieving high performance in a challenging environment’.
The research observes that rising input costs and persistent lower capacity utilization pose great challenge for steel players across the globe.
The study points out to two trends in the global steel industry – low demand growth in developed markets, and a structural shift in the global steel industry to developing countries like India and China.
Margins of Indian steel companies have been under pressure despite strong volume growth because of high input costs and a weak macroeconomic environment, both globally and domestically.
The enterprise value of Indian steel industry declined 30 percent since fiscal year 2010 because of falling margins and muted demand growth, which made investors cautious, the report shows.
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