SSAB has recently opened an office in Egypt and is working on establishing one in Algeria. Both countries offer great potential for new business opportunities, and the start in Egypt has been very good. There are also plans related to Western and Central Africa.
SSAB aims for global leadership in Quenched & Tempered Steels (Q&T) and in targeted Advanced High-Strength Steels (AHSS) segments. One way to do this is to increase the focus on emerging markets, where the penetration of high-strength steels is still low and growth potential is high as customers upgrade their steel usage from standard to high-strength steels.
“North Africa is a very interesting market area for SSAB for several reasons. One is the huge potentiality in upgrading – in many countries in the region, except for Morocco and Tunisia, there is, for example, no single tipper or trailer manufacturer currently using high-strength steels. Second, Africa is a huge continent and developing quite fast, so it offers growth possibilities. I think we just can’t afford to ‘miss the boat’,” says Carl Robert Borgenstierna, Area Sales Manager of SSAB Special Steels for North, West and Central Africa.
Challenges can be overcome by understanding the region
Despite fast development, there are also huge challenges and the economy in some countries has been impacted by different political and social crises. Some of the economic challenges related to, for example, the banking system, currency issues and prices of materials might already be known to some Europeans, but there are also things, such as the difficulty sometimes in sending a fax, that sound strange. Of course there is also the security question while travelling and driving in some African countries.
“The list of challenges is long, but they shouldn’t be exaggerated either – they can be overcome by really understanding the region, the culture and the people that you are dealing with. The more you discuss with partners and customers and the more you travel, the more you understand that the arguments related to planning, time, investment decisions and local environmental concerns are not the same. In Africa, we really need to try to have an entrepreneurial mindset,” continues Borgenstierna.
Sales and technical development work together
SSAB has a strong tradition of good cooperation between sales and technical development and needs to be able to support sales and provide the relevant technical arguments for upgrading to the end-user.
SSAB's customers highly appreciate this approach and technical support, and this is helping to increase customer loyalty and trust.
Know Your Customer Process in Human Rights
For example, Nigeria is a vast country with many possibilities, but the economic situation and political unrest is slowing down end-user activities. Ghana, to, is a very promising market for SSAB.
“It is important to point out that we have also started a very interesting project in the region called Know Your Customer Process in Human Rights. Basically it means, for example, developing processes to carry out customer checks to try to ensure that our customers comply with Human Rights Guidelines and that our products do not end in the wrong hands,” states Borgenstierna.
Competition is tough
Just like in more mature market areas, there is tough competition. The products are, of course, subject to price competition. However, Hardox is a very well-known brand and used also when referring to wear plate in general.
“The potential is huge, but we need to work hard to get our share. Our goal at the moment is not only to count tonnes, but to develop a solid and coherent sales structure in the region. SSAB’s strength lies in the way we work with our customers and also with our distributors. A good steel supplier responds promptly, is easily accessible, ready to travel, communicative and creates the feeling of being close to the customer,” says Borgenstierna.
Among the most important customer segments is heavy transport and raw materials handling, including the cement and concrete industry sub-segments, as well as the mining sector in some of the countries in Western and Central Africa.
SSAB also has a lot of opportunities with value added services (VAS): tipper kits, wear parts, pre-cut flanges and webs for chassis, etc.
Each country is a story of its own
“In Western and Central Africa, I believe in close cooperation with distributors, since there are several small end-users scattered across the region. So the goal is to have a well-functioning distributor network based on the Hardox Wearparts concept in order to reach as many end-users as possible. But also, as is the case in Egypt, we have a well-established logistics distribution set-up with our partner El Marakby MKS. It is important to be flexible and to adapt to the specific situation of each country”, emphasizes Borgenstierna.
Each country is a different story. In Morocco, SSAB has long traditions and the local sales have succeeded in creating a network of trusted partners with outsourced cutting, drilling and parts production to find the solution to local customer needs.
And, for example, in Algeria there is a new law trying to reduce imports, which means that also some automotive and transport solutions companies are thinking of investing in local manufacturing or assembly units, which in turn means new opportunities for SSAB.
It can sometimes be hard to get relevant market intelligence information, which makes good customer relations and a local presence at trade fairs, etc. as well as a partner network, even more important.
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