Transcript Kein Folientitel - Bruno Ruettimann

ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
8th International Aluminum Extrusion Technology Seminar
ET‘04 May 18-21, 2004
Orlando, Florida
The Effects of Globalization
on the
Aluminum Extrusion Industry
Part 2: Implications
Bruno G. Rüttimann, Alcan Singen GmbH
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Mergers &
Acquisitions
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Trade
Deregulation
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Increasing
Competition
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Price
Pressure
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Flow of
Information
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Interlinked
Markets
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
World-wide
Strategies
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Reduced
Growth Rates
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Overcapacity
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Unemployment
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
CONTENT
Part 2 (General Session): Implications
.
 Summary Part 1: Theoretical Considerations
 The Dimension of Globalization
 The Emerging New Paradigm
 The 10 Extrusion Postulates of Globalization
 Restrictions and Strategic Options for Extruders
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Basic classification of business types
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Basic classification of business types
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
ET ‘04 May 18-21, 2004
Orlando, Florida
PRODUCT CHARACTERISTICS
differentiated
non differentiated
Basic classification of business types
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
PRODUCT CHARACTERISTICS
differentiated
non differentiated
Basic classification of business types
Convenience
Speciality
Standards
Commodity
polypolistic
oligopolistic
MARKET STRUCTURE
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
PRODUCT CHARACTERISTICS
differentiated
non differentiated
2 main types
Type 1: material G. (physical)
Type II
Type I
polypolistic
oligopolistic
MARKET STRUCTURE
Type 2: immaterial G. (financial)
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
classification
classification
Operating
Operating
configuration
configuration
Typeof
ofglobalization
globalization
Type
PRODUCT CHARACTERISTICS
differentiated
non differentiated
2 main types
Type 1: material G. (physical)
Type Ib
TypeType
II Ic
Type Ia
polypolistic
oligopolistic
MARKET STRUCTURE
Type 2: immaterial G. (financial)
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Aluminium industry structure and globalization type
Bauxit mining,,
PRODUCT CHARACTERISTICS
non differentiated differentiated
alumina production
Primary smelter,, casting
Type Ib
Type II
Rolling,, extruding,,
die casting,, forging ,...
Type Ia
Scrap,
finished products
waste
Remelters,,
foundries
Usage
polypolistic
oligopolistic
MARKET STRUCTURE
Components,,
Recycling
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
Aluminium industry structure and globalization type
Bauxit mining,,
PRODUCT CHARACTERISTICS
non differentiated differentiated
alumina production
Primary smelter,, casting
Type Ib
Type II
Rolling,, extruding,,
die casting,, forging ,...
Type Ia
Scrap,
finished products
waste
Remelters,,
foundries
Usage
polypolistic
oligopolistic
MARKET STRUCTURE
Components,,
Recycling
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
Deriving Typologies of Globalization
g,
,Rolling,
extrudin
olling,
, extruding
, extruding,,
Aluminium industry structure and globalization type
Bauxit mining,,
PRODUCT CHARACTERISTICS
non differentiated differentiated
alumina production
Rolling,
,, ,extruding,
extruding,
Rolling,
Type
Ib
Rolling,
extruding,,, ,
Primary smelter,, casting
Rolling,
, extruding,,
Rolling,, extruding,,
Type II
Rolling,
extruding,, ,
Rolling,
,, extruding,
casting,
, ,forging
die casting,
forging ,
die
,...,...
die
casting,
,
forging
,...
die
casting,
,
forging
Type
Ia
die casting,, forging ,...
die casting,, forging ,...
casting,,,forging
,... ,...
diedie
casting,
forging
casting,
, forging
ng,, forgin
Scrap,
finished products
waste
Remelters,,
foundries
Usage
polypolistic
oligopolistic
MARKET STRUCTURE
Components,,
Recycling
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
... a Big Change is Occurring
European price evolution of rolled and extruded products
9
?
8
7
DM/kg
10
6
5
5000
LME DM/Ton
Opening of Eastern EU
4000
3000
LME
2000
Rolling
1000
Extrusion
0
1980
ET ‘04 May 18-21, 2004
1984
Orlando, Florida
1988
1992
1996
2000
B. Ruettimann, Alcan Automotive
The Dimension of Globalization
Global view of extrusion production in 2001

CIS
650
E. EU
300
N. America
1770
West Europe
2400

China
1300

Japan
1020

L. America
675
ET ‘04 May 18-21, 2004
Orlando, Florida
Africa
450
Asia
1197
B. Ruettimann, Alcan Automotive
The Dimension of Globalization
Global view of extrusion flows in 2001
24
43
14
E. EU
300
93
N. America
1770
13
151
L. America
675
ET ‘04 May 18-21, 2004
Orlando, Florida
West Europe
2400
CIS
650
171
Japan
1020
China
1300
54
39
55
16
66
27
Asia
1197
Africa
450
23
B. Ruettimann, Alcan Automotive
The Dimension of Globalization
Geographical distribution of selected group plants
Group
Alcan
Alcoa
Bonnell
Capral
Corus
Hydro
Indalex
Kaiser
Pechiney
Sapa
YKK
TOTAL
N-America
5
45
7
6
5
40
15
7
9
14
6
17
7
10
15
7
2
1
L-America
W-Europe
E-Europe
11
4
14
1
1
2
4
23
9
11
CIS
China
Japan
1
Africa
1
6
1
1
1
Asia
1
4
1
Source DIAC
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
3
The Dimension of Globalization
Geographical distribution of selected group plants
Group
Alcan
Alcoa
Bonnell
Capral
Corus
Hydro
Indalex
Kaiser
Pechiney
Sapa
YKK
TOTAL
N-America
5
45
7
6
5
40
15
7
9
14
6
17
7
10
15
7
2
1
L-America
W-Europe
E-Europe
11
4
14
1
1
2
4
23
9
11
CIS
China
Japan
1
Africa
1
6
1
1
1
Asia
1
4
1
Source DIAC
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
3
The Dimension of Globalization
Geographical distribution of selected group plants
Group
Alcan
Alcoa
Bonnell
Capral
Corus
Hydro
Indalex
Kaiser
Pechiney
Sapa
YKK
TOTAL
N-America
5
45
7
6
5
40
15
7
9
14
6
17
7
10
15
7
2
1
L-America
W-Europe
E-Europe
11
4
14
1
1
2
4
23
9
11
CIS
China
Japan
1
Africa
1
6
1
1
1
Asia
1
4
1
Source DIAC
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
3
The Dimension of Globalization
Geographical distribution of selected group plants
Group
Alcan
Alcoa
Bonnell
Capral
Corus
Hydro
Indalex
Kaiser
Pechiney
Sapa
YKK
TOTAL
N-America
5
45
7
6
5
40
15
7
9
14
6
17
7
10
15
7
2
1
L-America
W-Europe
E-Europe
11
4
14
1
1
2
4
23
9
11
CIS
China
Japan
1
Africa
1
6
1
1
1
Asia
1
4
1
Source DIAC
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
3
The Emerging New Paradigm
Dynamics of paradigm change in fragmented markets
Propensity for globalization
(Type 1c)
+
+
Strategy to grow
globally for K
Strategy to grow
globally for Z
+
+
-
+
-
Globalization
Type 2
+
Globalization
Type 1c
+ Shake out
in K
Take over
in Z
+
+
-
Export (Z K)
+
Domestic
demand K
ET ‘04 May 18-21, 2004
Orlando, Florida
-
+
Domestic
demand Z
B. Ruettimann, Alcan Automotive
The Emerging New Paradigm
Dynamics of paradigm change in fragmented markets
Propensity for globalization
(Type 1c)
+
+
Strategy to grow
globally for K
Strategy to grow
globally for Z
+
+
-
+
-
Globalization
Type 2
+
Globalization
Type 1c
+ Shake out
in K
Take over
in Z
+
+
-
Export (Z K)
+
Domestic
demand K
ET ‘04 May 18-21, 2004
Orlando, Florida
-
+
Domestic
demand Z
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 1
PRODUCT CHARACTERISTICS
non differentiated differentiated
Type 2 globalization will not change the
fragmented market structure and its
related market rationale.
Type Ib
Type II
Product
Product
characteristics
characteristics
Market
Market
structure
structure
Business
Business
type
type
Operating
Operating
configuration
configuration
Type Ia
Typeof
ofglobalization
globalization
Type
polypolistic
oligopolistic
MARKET STRUCTURE
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 2
Family-owned independent SME will
continue to exist in concomitance of
group integrated extruders.
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 3
The new opportunity of internet bidding
can create the preconditions for a new
world market price.
Saturation in
existing
end markets
Price/
Price/margin pressure
Change of
competitive system
Shake-out
+
Searching for
optimization potential
Searching for
geographical expansion
M&A
Opening of a
global market
with new
competitive
environment
and new
world market
price
Searching for
diversification opportunities
World-wide
communication
network
Concentration process
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 4
Price difference in different economies
will generate a propensity for type 1c
globalization.
BC
D E
F
G
pK
H
Price span
of similar
economies
I
Demand Z
Offer Z
Z
pZ
Globalization
propensity
(pK -pZ -cZK )
Transaction
cost cZK
500
LK
1
400
0,8
0,9
0,7
s ZK
VZK  LK  e
300
pZK  p0ZK 
0,6
0,5
200
0,4
VZK
 ZK 
100
pZK
VZK
0,3
pZK
0,2
Elasticity
A
pA
VZK Globalization volume (kton)
Price
0,1
0
0
p0
0
0,5
1
1,5
2
Propensity (Euro/kg)
Volume
ET ‘04 May 18-21, 2004
Orlando, Florida
Propensity function
Elasticity for globalization
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 5
A new eclectic market type is potentially
arising with a still fragmented market
structure but type 1c world price
characteristics.
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 6
This type 1c is unstable, and has only
transient character because of growing
overseas demand and shrinking
propensity.
Propensity for globalization
(Type 1c)
+
+
Strategy to grow
globally for K
Strategy to grow
globally for Z
+
+
-
+
-
Globalization
Type 2
+
Globalization
Type 1c
+ Shake out
in K
Take over
in Z
+
+
-
Export (Z K)
+
Domestic
demand K
ET ‘04 May 18-21, 2004
Orlando, Florida
-
+
Domestic
demand Z
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 7
Price level in high-price economies will
drop temporarily as long as price
differences will exist.
Offer K
Demand K
10

Offer K‘
9
initial
equilibrium
pdom
final
equilibrium
price drop of
domestic supplies

pK
8
Offer Z
7
6
LME DM/Ton
5000
pZ
shake out
volume
increase
DM/kg
Price
5
Opening of Eastern EU
4000
3000
2000
1000
0
remaining domestic
supplies Vdom
import
supplies VZK
VK
ET ‘04 May 18-21, 2004
Orlando, Florida
1980
VK‘
VZ
Volume
1984
LME
1988
1992
Rolling
1996
2000
Extrusion
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 8
Shake-out of less competitive extruders is
foreseeable.
Price
Offer K
Demand K
Offer K‘
initial
equilibrium
pK
pdom
final
equilibrium
price drop of
domestic supplies
Offer Z
pZ
shake out
remaining domestic
supplies Vdom
volume
increase
import
supplies VZK
VK
ET ‘04 May 18-21, 2004
Orlando, Florida
VK‘
VZ
Volume
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 9
Demand will increase due to lower price
level and open the access to new
applications.
Price
Offer K
Demand K
Offer K‘
initial
equilibrium
pK
pdom
final
equilibrium
price drop of
domestic supplies
Offer Z
pZ
shake out
remaining domestic
supplies Vdom
volume
increase
import
supplies VZK
VK
ET ‘04 May 18-21, 2004
Orlando, Florida
VK‘
VZ
Volume
B. Ruettimann, Alcan Automotive
How to Respond
COMPANY TYPE
Independent
Group
Integrated
SME
Restrictions and strategic options for extruders
Concentrate
on service
(cost remains
an issue)
Technology or
solution driven
X
Idem
Idem, but exploit
specialization
within the network
Take over / JV
in economy Z
Defend
Export
Type 2
BASIC STRATEGY ORIENTATION
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
The 10 Extrusion Postulates of Globalization
Postulate 10
Extruders situated in high-price
economies will have to further
concentrate their offer on service or
technology based performance.
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive
ET ‘04 May 18-21, 2004
Orlando, Florida
B. Ruettimann, Alcan Automotive