While many companies operating in the energy sector were faced with challenging market conditions after the fall in oil and gas prices in mid-2014, voestalpine Specialty Metals managed to strengthen its market position.
voestalpine Specialty Metals was opened in early 2014 as a distribution center to support the oil and gas industry and the long term strategy of voestalpine in the energy sector. Nevertheless, after a strong start, the oil price plummeted in mid-2014, leaving the industry struggling to cope. As a result of the slump, the number of rigs operating in the US was scaled down. Furthermore, the price per barrel dropped. This led to a series of rationalization measures among competitors which created a vacuum, allowing voestalpine Specialty Metals to move in and accelerate its business.
"When the market was falling, voestalpine was and is there to help service companies rebuild their business’ supply chain model."
Continuing to invest where others were pulling back also helped the company gain approval from major OEMs. “We are expanding into products that fit the industry and make us stronger for the long term”. An example of that is the completion tool segment. The down turn has allowed voestalpine Specialty Metals to accelerate the process of entering into long term agreements with major OEMs who will now promote voestalpine Specialty Metals within their approved network.
voestalpine Group as an important backbone
Moreover, voestalpine Specialty Metals managed to raise the bar in terms of financial strength over the past two years. One of the reasons why this could be achieved was the backing of the voestalpine Group. However, the utilization of its distribution network also played a large part in steering the attention of potential customers towards the strength and reach of voestalpine as a global supplier.
"The sourcing landscape has changed and when the market returns the industry will not find the same field of suppliers. This is our greatest opportunity."
Positive long term outlook for Oil and Gas
At this point, the worst of the Oil and Gas market downturn seems to be behind us. Investments and business for voestalpine Specialty Metals are picking up. Towards the end of 2016, the company received commitments in business and now expects an increase in sales in the next fiscal year.