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Antonio Marcegaglia to Siderweb: the tools to face a rapidly changing market

  The first stage of “Mercato & Dintorni”, the new webinar project by Siderweb dedicated to the analysis of the steel market, saw Antonio Marcegaglia, Chairman and CEO of the Marcegaglia group, as protagonist.
  Interviewed by Lucio Dall’Angelo, general manager of Siderweb, Chairman Marcegaglia analyzed different aspects of the present and future economic and steel scenario, starting from the assumption that “we are undoubtedly in an epoch-making period and we have dramatically learned on our skin how a single phenomenon can upset our social habits and our economies, so interdependent: making predictions in this totally new context, therefore, is certainly not easy.”
“I am convinced that it is necessary not to exasperate the recent change of perspective but, on the contrary, we must remain anchored to a recent history that we hope can be partly recovered”, Chairman Marcegaglia began. “The Bank of Italy has recently estimated that Italian GDP will fall between 9% and 13%, while the Confindustria Study Centre estimated a 25% drop in industrial production in the second quarter (still missing June). I, however, want to underline that if in April there was a -44% and in May a -34%, it means that for June we should expect an increase in industrial production: therefore, although we were so dramatically affected, I want to be able to say that for a large part of this decline we have already paid the price and that, perhaps, from July we could reason with numbers not too different from those before this period. The overall drop of 12-15% forecast for the year 2020 in the steel sector assumes, therefore, a fair third quarter and a fourth quarter in recovery. I fear, however, that the loss in value (estimated at around 10%) may have a structural connotation, so the element of recovery in the future may be the most painful factor for our sector and our economy.”
Asked about the possibility of reshoring in the steel industry, Antonio Marcegaglia stressed the limits of this model for the European market, characterized by a shortage of raw materials, uncompetitive labour and energy costs, and a greater sensitivity to the environment compared to China, Russia but also the USA. “Eurofer has launched important challenges in terms of reshoring, but difficult to apply, as they require time and substantial investment. European industry, and Italian industry in particular, are mainly processing, with raw materials coming from abroad. That said, imports are destined to decline, increasing the role of European players, including Italian ones: I do not believe, therefore, in a strong reshoring of steel but in a greater role for Italy and a certain regionalisation, without a complete rethinking of the production chain.”
Regarding the role to which the European Union is called, Chairman Marcegaglia said: “I am a convinced pro-European, but unfortunately Europe today behaves like a downward synthesis of the interests of individual nations. I expect two interventions from the EU: financial aid, which we dramatically need, and - even more importantly - the ability to stimulate market demand, especially through state intervention. With this in mind, it would have been right to adjust the quotas to the expected consumption in the coming months.”
The conversation with Siderweb also touched on the Ilva theme: “I believe that the entrepreneurial state can make sense in some truly strategic sectors (such as defence and telecommunications), while in other sectors, including the steel industry, it can be useful only temporarily at a time of uncertainty, while it should not be an ongoing subsidy to maintain production and employment levels: less ideological and more pragmatic solutions should be found.”
On the M&A front, Antonio Marcegaglia reiterated that “our interest in Acciai Speciali Terni is neither new nor opportunistic, but long-standing. Let's imagine a valorisation of the assets through synergies of industrial (for stainless steel coils, stainless steel vertical products and special carbon steels) and commercial nature at European level and not only. In the next few days we will be in Terni just to make ourselves better known by the local institutions, but the decision lies primarily with ThyssenKrupp.”   Finally, the Chairman described how the Marcegaglia group reacted promptly to the Coronavirus emergency: “During the lockdown the first thing we thought about was the health of our employees. We then focused on shipping activities through our logistics hub in Ravenna. Then we revised our budget, with a 10-12% downsizing, and we put in place a deep reorganization of processes, work organization and costs: for this I would like to publicly thank all the employees of the group, at all levels, for their commitment.  On this occasion I relaunched 4 fundamental concepts of our DNA, fundamental for every company that wants to compete in the future: agility, adaptability, responsiveness and focus. In the face of a market that will be contracted, nervous, volatile and unpredictable, we will have to be quick to adapt to every situation. This is why we are aiming to defend profitability, trying to safeguard marginality in the face of a reduction in volumes.”
“In these months I have further deepened some of my parents' teachings: we are entrepreneurs, but the most important value is the community (at all levels: family, collaborators and steel players) which must remain the reference point, transcending the pure economic aspect”, concluded Antonio Marcegaglia. “We have a difficult period ahead of us but I’m confident that I can defend a year that, while not being like last year, will still be discreet. To do so, it is necessary to remember that the world does not end in 2020 or 2021, always looking far away.”
The full webinar “Mercato & Dintorni” with the interview to Antonio Marcegaglia is available here.

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