ANNUAL REPORT ARCELOR 2003 - paperJam

Within this context, and in order to assist the Group’scustomers with their international growth plans and tobe able to supply them anywhere in the world withidentical products meeting the same standards ofquality irrespective of the country, industrial partnershipshave been developed, notably with Tata Steelin India, Bao Steel and Nippon Steel Corporation inChina, Severstal in Russia, Borcelik in Turkey, Dofascoin Canada as well as Gestamp and Magnetto in Europeand South America.At the commercial level, Arcelor’s Flat Carbon Steelssector is organised into two divisions. The first specialisesin the automotive industry, while the second is dedicatedto general industrial customers. These two teams usea common network of sales offices located in more than20 countries.Within the General Industry division, sales are organisedby segments: distribution, domestic electrical appliances,construction and general industry, with metal processingand the primary processing industry.3. THE SECTOR’S PRODUCT ANDMARKETS3.1. AutomotiveThe Flat Carbon Steels sector offers the automotiveindustry a complete range of products and services:coils, coated products, finished products, formed andwelded blanks, but also technical assistance and adviceduring the vehicle design stage and when the steel isprocessed. Arcelor Auto handles the distribution. ArcelorAuto has a worldwide presence in order to meet theglobalised demand of carmakers and first-tier subcontractors.Arcelor Auto operates primarily as an interfacebetween entities of the Arcelor group and their customers(notably in Europe and Brazil), but also with certain Arcelorjoint venture subsidiaries (Borcelik in Turkey, Severgalin Russia, and Dosol in Canada).Arcelor Auto works closely with carmakers, starting atthe vehicle design stage. Resident engineers are placedat the disposal of the carmakers at their design centres.Technical support engineers assist in the developmentand manufacturing phases in order to facilitate theprocessing of the steel. Arcelor Auto also defines andpursues an extensive product research and developmentprogramme so that it can continually put forwardnew solutions that are both economical and efficient.Arcelor Auto has a 14% share of the world market, witha very strong position in Europe. Its market share outsideEurope varies from 3 to 15%, depending upon geographicregion, with substantial opportunities for growth.3.2. The General Industry divisionConstructionIn the construction market, the Flat Carbon Steels sectoroffers its customers all the advantages of an internationalplayer: a large number of production and processingplants, a broad range of products, extensive experiencein high added value products (prepainted plates, highyield steels). While continuing to concentrate on the roofing/cladding segment and interior fit-out, in cooperation withArcelor BCS (Building and Construction Support) it isdeveloping new lines of activity (garage doors, lightingcolumns, swimming pools, etc.) and new niche productssuch as skin plates (plastic film coatings) or very thickgalvanised plates.DistributionThe first objective for the Distribution segment in 2002and 2003 was to stabilise the order book, standardisesales terms, and optimise the product/customer mixto improve the return on capital employed. For strategiccustomers, who use both full-width and processedproducts, a special cooperation procedure was set upbetween the Flat Carbon Steels sector and the Distribution-Processing-Tradingsector, for the joint handlingof all services to the customers concerned.42ANNUAL REPORT ARCELOR 2003