[Asian Steel Watch] Vol.4 (2017.12)
Featured Articles Legacy from European Restructuring Experiences and Its Implications to the Asian Steel Industry
Since the 1973 oil crisis when steel demand peaked, the steel industry experienced a long, hard and costly restructuring process. Restructuring of the European steel industry was taking place from the mid-1970s under such a context that the steel demand had passed its peak level as industrialization and urbanization had seen their close completion. National economic priorities were then transforming gradually from industrial sector to service sector and industrial sector itself was transforming from traditional manufacturing industries to advanced and hi-tech ones. The privatization process lasted for 10 years, involving in many stakeholders. As a result, steel capacity was cut by 20% and steel capacity utilization ratio surpassed 70%, employment reduced by 44%, and labor productivity of the west European steel industry improved by 60%.
As exit barriers and institutional accommodation prevent restructuring from timely start-up and completion, the government has a role to play in the restructuring process at different levels.
It can provide a policy framework where restructuring can take place and ensure a level playing field during the restructuring process. While macro-economic conditions and government favorable measures came out, it is then the individual steel company that plays a vital role in the restructuring process. Besides focusing on internal adjustments, individual steel companies could pay some due attention to changes both in the economy and society, such as social and industrial megatrends (demographics, technologies, process, and IoT), and their possible impacts upon the future steel industry.