A matter of traditions

Although they go unnoticed, there is news of meetings of owners of general galvanizing plants with powerful business groups or investment funds. They usually refer to plants that have accumulated losses and negative results in periods of crisis, but not exclusively. In the general galvanizing sector, it has not been infrequent to go from high returns to impossible survival in a matter of few years. Curiously, due to growth imbalances in those metal sectors under the sight of the galvanizing plantss. Please ask the Spanish sector about the activities of solar thermal or photovoltaic energy.

The truth is that customer demands increased throughout the decade before 2009, when the slowdown in public works and construction came together. But sometimes skinny cows eat fat cows, at least since the Pharaonic times of Joseph, and despite the fact that the manuals published by business schools warn of the real risks of not taking countercyclical positions in good times, many regions had to cope with a market that rapidly decreased the demand. And you know what happens when production falls drastically: price drops and companies deteriorate rapidly. The “good vibes” between competitors becomes stab wounds.

In many European countries, companies bitterly complain about their competitors’ behaviour: they offer under-priced services, thereby putting everyone’s operating accounts at risk. In the case of hot-dip galvanizing, finances are not exactly a complex issue: personnel costs, energy costs, and above all, zinc costs.  This is a tiny sector whose advances in innovation are rather low. It is not strange that the photovoltaic sector prefers a similar but much more novel and competitive coating, such as ArcelorMittal’s Magnelis.

Therefore, it is not only about competing in global markets, but also about competing better and with more capacity against globally operating opponents that break into the usual regional markets where galvanizers have always felt safe.

The problem of the former “better” and “with more capacity” is, for this sector, the excessively short-term and localist vision of its productive criteria. It is something observed in many countries, not only in Spain. The hot-dip galvanizing industry must face the challenge of implementing novel organizational and production techniques. They are still using the same paradigms that have hardly changed in the last 160 years.

With this objective we created Lean Galvanizing™

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