October 30th, 2020

European steel after Covid-19: Antonio Marcegaglia at the Fastmarkets conference

On Monday October 26^th Antonio Marcegaglia, Chairman and CEO of Marcegaglia group, took part in “Steel Success Strategies Online”, a digital event organized by Fastmarkets.

Marcegaglia was speaker in the “European Steel Panel”, with a speech entitled “European steel after Covid-19”.

“The coronavirus emergency has exacerbated certain global trends already in progress: a substantial failure of multilateralism, the west/east political-economical opposition, the increasing differences between developed and underdeveloped world, the weakness of the EU project (including Brexit) and the growing protectionism”, began Antonio Marcegaglia. “Nevertheless, enormous resources have been made available worldwide and in Europe to tackle the socio-economic problems related to the pandemic, and this context is representing a unique opportunity to accelerate structural reforms.”

“From this emergency situation,” continued Marcegaglia, “we learnt that our socio-economical system is much more fragile than we thought and that the world and the globalized economy are highly interdependent: a single local phenomenon can quickly spread from one part of the planet to another with huge and almost simultaneous impacts. In emergency situations like this, therefore, the ability to forecast and anticipate the consequences of the emergency itself, as well as the reaction rate, become crucial. We must always think about a possible room for manoeuvre: we often have more resources than constraints, but we only discovered this during the emergency.”

For steel demand to resume “huge stimulus packages will be needed and the emphasis should move towards valuerather than volume, with a smaller role given to imports.

In this context, it is also important that decarbonization becomes a serious, long-term and gradual process, sustainable also in economic terms and with adequate financial resources and technological developments.”

Antonio Marcegaglia then asked himself what is necessary to compete in the future. “It will be necessary to develop four skills: agility (low and variable costs, less financial and with limited invested capital), adaptability, reactivity and focus of financial and managerial resources on what is truly relevant.”

“In this perspective Marcegaglia will have to move from a position of resilience to one of anti-fragility, changing and improving in the front of stress, volatility and disorder.

That’s why our strategy is based on smart growth (made of opportunities able to generate value at a competitive cost; product and process innovations; targeted M&A), smart operations (low fixed costs; flexible structures; evolution of digital and IT systems; rethinking of shiftwork, plants, internalizations-outsourcing relationship) and smart working.”