Steels and metals

We help our steels and metals clients to outlast commoditization and to find a pathway to growth in challenging times

The future of the steel and metals industry

The global steel industry is the critical backbone of the industrialized value chain. An essential base material for significant sectors, such as automotive and aerospace, steel is a centerpiece of innovation and economic growth. But despite steel’s importance, for the industry today, uncertainty seems to be the only certainty.

PwC’s Strategy& brings an in-depth understanding of industry dynamics, extensive experience along the entire value chain, and broad functional capabilities to assist many of the world’s leading metals and mining companies.

We use our unique Capabilities-Driven Strategy and Fit for Growth* frameworks to assist clients with transaction support, operational excellence, efficiency enhancement, restructuring, and innovation management. We are frontrunner in the field of digital transformation and new business models for the metals & mining industry.

Industry trends - Steel and aluminum, quo vadis?

Industrietrends – Stahl und Aluminium, quo vadis?

The steel and aluminum industries have multiple similarities. Both industries produce alloyed metals from price-volatile ores and secondary scrap material. These products are manufactured in comparable capital-intensive processes from casting to finishing and are used by similar customers, such as those in automotive, engineering, and construction companies.

However, an analysis of key performance indicators reveals how dissimilar steel and aluminum enterprises are from each other. At present, the aluminum sector is faring better than steel, in large part because aluminum is a still evolving market.

But four megatrends — energy shifts, digitization, urbanization, and globalization — are already transforming both industries, and their impact will only be amplified in the coming years. In response, aluminum and steel companies need to adopt new strategies that effectively address investment constraints, changing market demands, R&D, product development, cost containment, efficiency, and the strategic moves of competitors. These strategies, the centerpiece of a framework developed by Strategy& to provide a dynamic pathway to growth for the steel and aluminum industries, take four forms: strengthen core, extend capabilities, tap into new regions, and revamp business models.

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How can we help you?

Business strategy

There are distinct ways to play that companies in the metals industry should explore in an attempt to forge a new future for their business and restructure the industry.

We work with metals companies to build tailored solutions for tackling the full range of strategic and competitive challenges they face. Our teams help clients develop their strategic focus, envision the future, set clear expectations, and develop and implement appropriate strategies, such as:

  • Capability Driven Strategy
  • Fit for Growth
  • Business portfolio optimization
  • Market entry strategies

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Operations strategy

We support our clients in the sustainable optimization of their entire cost base with:

  • Target operating model definition (processes, organization, data and IT)
  • Production optimization including operating asset effectiveness and production network redesign
  • Supply chain and logistics optimization
  • Outsourcing / offshoring analysis
  • General and administrative expenses cost reduction (e.g., shared services, outsourcing, offshoring)

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M&A transformation

The metals industry is in a consolidation game. Based on our proven industry expertise and our functional experience in the support of all phases of M&A processes, we support metals clients during target assessment, synergies quantification, regulatory strategy, and integration program implementation. Major support activities include:

  • Acquisition strategies
  • Business carve-out
  • Clean room operation
  • Due diligence support
  • Financial analysis and valuation
  • Post-merger integration

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Technology strategy

In today’s digital world, we help clients elaborate and implement competitive strategies for accessing, developing, and deploying digital solutions and business models such as:

  • R&D effectiveness assessments
  • Linkages of development and marketing
  • New product innovation and penetration strategies
  • Digital strategies and enabler (Organization, Governance, Talent, Culture, IT Architecture and Data Management)
  • Horizontal and vertical integration strategies
  • Digital solutions like 3D printing, data and analytics in metals production and maintenance, predictive analytics and simulations
  • Digital business models like ecosystems and forward integration / system supplier

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Case Studies – How do we work with our clients?

  • Strategy through Execution
  • Business Strategy
  • Operations Strategy
  • M&A
  • Technology Strategy

A mid-sized special steel company wanted to strengthen its position and grow its value within the challenging and increasingly competitive European steel market. To do this, it needed to redesign its organizational structure to incorporate multiple independent legal entities, redirect investments from loss making entities and re-integrate the value chain.

A medium-sized European steel company wanted to develop a coherent business unit strategy aligned to the corporate strategy 2025+. Strategy& helped by creating an Outside-in perspective including market trends, competitor attitude and customer perspective. This results were matched with the inside-out knowledge to derive a strategy roadmap and concrete strategic initiatives.

Strategy& supported a metals client in achieving Operational Excellence and transforming the company’s operating model. The focus was on procurement, sales, HR, supply chain and logistics. Strategy& helped the client to achieve efficient processes and structure as well as cost savings.

Strategy& developed for a global steel company a M&A-Strategy to assess possible investment & partnership opportunities aligned to the corporate strategy. Strategy& evaluated several supplier and competitor companies aligned to the client’s core capabilities to identify appropriate nominees. Additionally, Strategy& developed an implementation plan.

Strategy& supported an European metals client in developing a Digital Roadmap for Industry 4.0 (digital operations). Therefor Strategy& identified research and development spend for digital operations in the relevant area, contributed with required capabilities in sensors, automation and analytics and developed an Industry 4.0 Eco-System.

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