Over recent weeks the steel industry has been dominating our news headlines and yet the problems it faces have been long in the making. Grant Sare, Corporate account manager at ERIKS, provides opinion on the current situation and one aspect that could help support its survival.
Competition from foreign markets, falling steel prices and the wider economic slowdown have all contributed to the current steel industry crisis, yet where the UK is really struggling is competitiveness.
In a recent government report, ‘UK steel industry: statistics and policy’, it was highlighted that UK steel industry has reduced in size dramatically over recent years - currently representing just 0.1 per cent of the UK economy and 1.3 per cent of manufacturing output. While those numbers may seem small, in 2014 the steel industry actually contributed £2.8bn to the UK’s balance of trade, according to UK steel, and plays a major part in other industry sectors too. In fact, when you consider the wider service industries that support the sector, its national worth is even greater.
While some of the struggles facing UK steel are being felt by other EU countries too, the UK differs on one crucial level - its energy pricing structure which, according to the report, is cited as being 50 per cent higher than other EU countries. UK Government has developed a new policy to help aid the sector via compensation mechanisms to soften the blow of EU policy, but where the sector can really begin to help itself is through greater energy efficiency.
It is widely recognised that automation is playing a major role in the competitiveness and productivity of the UK manufacturing and industrial sectors, as well as asset management and plant improvement strategies. With the ability to measure and monitor equipment, businesses can develop a greater understand of their consumption patterns and as a result make significant savings.
This is something that TATA Group has been doing with the ERIKS business for some time now. Working with an embedded team of experts, the business has been able to develop a Total Cost of Ownership model which has produced some excellent results, in terms of efficiency savings.
Needless to say, I’m not naïve enough to think that asset management and support services to the steel industry is the cornerstone of UK steel’s survival but it is something tangible and something that we can do and support. We certainly aren’t going to change the industry overnight but through improved operations, the adoption of new technology as well as long term government support, at least the industry may have a fighting chance in terms of a level playing field.
We have already delivered considerable savings over the contract period and we are certain that there are many more savings opportunities to explore enabling ERIKS to demonstrate our commitment to the UK steel industry in assisting in securing the sustainability of the industry.