No silver lining for global metals CEOs says PricewaterhouseCoopers



    TORONTO, Feb. 10 /CNW/ - A difficult economic climate, plummeting demand
and lack of access to credit are just some of the difficulties facing global
metal CEOs today. The steel sector has given back all of the pricing gains
that were achieved in 2008. The aluminum sector has also been experiencing
considerable pricing pressures and it is suspected a number of global
producers are operating at a loss. These are a glimpse of the findings of the
12th Annual Global CEO Survey metals cut by PricewaterhouseCoopers (PwC) which
included input from 25 global metals CEOs. Only 44% of them are confident
about prospects for revenue growth in the coming year compared with 64% of the
total survey sample.
    "It is no surprise that metals CEOs are gloomier than their peers in
other industries surveyed by PwC," says Jim Forbes, global metals leader, PwC.
"Even in areas where there is still demand for metals, many customers cannot
access Letters of Credit to support their orders."
    That said, 80% are optimistic about their long-term outlook and believe
they can increase their revenues over the next three years. Joint ventures and
strategic alliances are high on the agenda with 76% of respondents expecting
an increase in collaborative business arrangements in coming years. 36% are
focussing on new geographic markets, in marked contrast with the total survey
population of 17% and 24% see existing market penetration as key.
    "Due to the current crisis, only 4% of metals CEOs see mergers and
acquisitions as their main means of growing revenues - a view that makes
sense, since tumbling metals prices have already called the economics of
several recent acquisitions into question," notes Forbes.
    Metals CEOs are more likely than CEOs in other sectors to see low-cost
competition as a serious problem - 56% versus 48% of total survey sample.
    Increased pressures on natural resources is one of the issues that most
concerns 80% of metals CEOs yet only 36% think that scarcity of natural
resources is a commercial threat. 48% are concerned that the world's
dependence on carbon-based energy sources could have a deleterious impact on
their companies.
    Managing supply chain risk is fundamental to remaining profitable in the
metals industry with 88% rating efficient sourcing or supply chain management
as critical to them. 80% regard information about sourcing and supply chain
management as critical or important, and they are generally happier with the
quality of the information they get than executives in other sectors. But
there is still room for improvement; 45% of respondents would like further
details, while 15% say that the information they get is inadequate.
    Talent and skills are not as high on the agenda as last year with 28%
planning to increase the number of employees and only 20% considering
downsizing. 32% are somewhat or extremely concerned that lack of people with
the skills they need will have a negative impact on their companies' growth,
compared with 66% last year. However, 60% are worried about declining college
and university enrolments in the sciences and technologies.
    In the longer term, metals executives will have to ensure that they
address systemic risks such as climate change and the impact of demographic
shifts on the talent pool. At present, metals CEOs typically place less weight
on ensuring the wellbeing of future generations or satisfying society's needs
(as distinct from those of investors) than their peers in other industries. As
we enter an era in which the corporate community is expected to assume a wider
array of responsibilities, the industry will have to extend its horizons.
    "What's next for the metals industry? Some companies - especially those
serving the sectors that are most affected by the economic downturn - will
certainly face tough times. The CEOs who head these companies will need to
focus on cutting costs and conserving cash," says Forbes.
    For more details or a copy of the report please visit
www.pwc.com/ceosurvey

    PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 155,000 people in 153 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP
(www.pwc.com/ca) and its related entities have more than 5,200 partners and
staff in offices across the country.
    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.




For further information:

For further information: Carolyn Forest, PricewaterhouseCoopers LLP,
(416) 814-5730, carolyn.forest@ca.pwc.com; Nina Godard, PricewaterhouseCoopers
LLP, (416) 941-8383 x 13520, nina.godard@ca.pwc.com

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