The strategic transformation of the steel industry

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The steel industry is an important sector of activity in France. More than just an evolution, we have seen a real strategic transformation of the steel industry in recent years. Production has become industrialised, allowing identical parts to be made in large quantities, to produce state-of-the-art assemblies. Far from the traditional sector to which it was attached, the steel industry is now a technology industry in its own right. It represents in particular shipbuilding or automobile, in which France excels.

The steel industry marks the French industry with a new mark

The steel industry represents the production of cast iron, iron and steel, three materials widely used in advanced construction. The construction of parts for the automotive, aeronautics and even naval sectors is the reputation of France. Indeed, major tricolour players are leading the market, such as ArcelorMittal, the world’s largest steel producer. The company, which has 200,000 employees worldwide, now runs three major production sites in Dunkirk, Fos sur Mer and Floranges. According to the Observatory of Metallurgy, in 2017 the steel industry had 38,085 employees in France. The concentration of jobs is particularly represented in the North of France and in the East of the country. Indeed, the Hauts de France region employs nearly 11,467 employees in 59 establishments, representing 30% of the national workforce.

However, the sector has seen a decline in its job supply in almost 10 years. In 2008, the steel industry employed 48,098 people, up from 38,085 in 2017. That’s 10,000 jobs cut. The number of establishments has changed during this period, reaching 422 establishments in 2017. Although competitive pressure abroad is increasing, the French steel industry still has good assets. Starting with the encouraging results of the sector, in terms of turnover. Indeed, although the decline in the number of jobs has led to a decrease in supply, the price of materials and parts for sale has increased. This has allowed us to maintain a certain balance, and even a benefit.

The tricolor steel industry threatened in the face of the dislove of the French?

In October 2019, the Senate held a debate about the future and the transformation of the steel industry. The aim of this debate was to be able to accompany the strategic transformation of this sector, in order to keep it up to its level. Indeed, France and the European Union are facing Asian competition, which represents a significant share of the market. The share of the budget invested in research and development is very important in Asia, from 4% to 5%. By comparison, ArcelorMittal’s budget is only 0.35% to 0.4%. The small share of the budget can be explained by several factors concerning production tools. Indeed, to produce more, a modernization of production tools is necessary. But these aging tools require significant investment.

On the other hand, investing in research is risky because it is very expensive, especially for an industry with few resources. Indeed, steel companies rely on private financing to continue their activity. In addition, the sector employs long-term employees, thus experiencing a relatively low turnover. But the advancing age of a large proportion of workers in the sector will have an impact: retirement. Victim of a lack of interest on the part of the French, the steel industry could have difficulties renewing its teams, with fewer technical profiles than before. On the other hand, giving jobs to recently graduated employees could also have a beneficial effect. They benefit from a more modern and current education, thus mastering new processes and production techniques. It may therefore be that by recruiting these profiles, productivity will be increased, in line with the hoped-for transformation of the sector.

The situation in New Aquitaine in a changing environment

The steel industry is mainly positioned in the North and East of France, and has its place on the world market, with its large groups. New Aquitaine, on the other hand, is less prominent in this sector, but still present. It has 1,337 employees and 28 establishments in its territory. In Bordeaux, there are companies specializing in the steel industry, such as L’Étoile, located next to the Pont d’Aquitaine. This company, established for more than 30 years, fits perfectly into the dynamics of the city. Indeed, it offers materials for the building, aeronautics, defense or armaments. A strategically sound positioning, when we know that aeronautics is the flagship of the Southwest, as well as defense and armament. The construction sector is not left behind, especially in Bordeaux, which is experiencing a strong development.

The notable development of business districts with the construction of greener and greener buildings is an important step in the transformation of the city. A transformation that goes hand in hand with the evolution of the local steel industry, applied to meet strategic needs. Ecological transition and strategic evolution of the steel industry are not in contradictions, but can be complementary. The latter is qualified as a sector of the future, allowing to stimulate all the sectors that constitute the French flagships.

Despite the apparent lack of interest in the French industry, this little-known sector is more than promised an important future. However, the development of the methods, and the renewal of the workforce, would help to dust off the too-classical image of this sector. In the end, allow it to occupy its place at the heart of our industries, and to shine beyond Europe. A strategic transformation, rooted in the future…

Sources:

INFORMATION REPORT – Senate, July 9, 2019

Letoile

The steel industry in France – Observatory of Metallurgy, 8 March 2019

Metallurgical Industry – France Industries Pro

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