Accenture India said it is grappling with lower profits amid sluggish demand. Local steelmakers need to invest in a raw material base to ensure long-term success.
The report said that with high costs and a weak macroeconomic environment, steelmakers began to show signs of a declining cycle, leading to a squeeze in margins. Steel firms must become more customer-centric and create differentiated supply chains to meet these goals.
Accenture India explains that since the supply of raw materials is a critical factor, it is possible to acquire, develop and operate overseas resource assets, given the short-term challenges in this area in India. "Metals companies must focus on project management as the foundation of their potential for growth; select the right projects and optimize the limited resources needed to support projects," the report says.
When steel companies expand to fill their respective markets with their products, a solution must be sought. Keep in mind that the combination of slowing demand growth and high competition means that there is a threat to business. In this scenario, increased focus on customer needs will have a positive effect. Smelters also need to build a differentiated supply base and a dedicated warehouse for strategic production.
