“Never let a good crisis go to waste” Winston Churchill used to say in the 1940s. This was the mindset of the Vanilla Steel founders that have launched a new e-auction platform designed for European steel suppliers.
While the COVID-19 pandemic has hit the global economy hard, the 170 bn€ European steel industry has fallen into a state of emergency. Already facing a global overcapacity of 500MT prior to the coronavirus, steel suppliers are under pressure to reinvent themselves in a market full of uncertainty with low demand. COVID-19 has accelerated the need for digital sales channels for steel that reduce the cost of selling as well as the cost of inventory. Yet not everyone is capable of building their own proprietary digital solution.
Given this very challenging context, a team of four digital entrepreneurs has launched Vanilla Steel. Alexis Ducros, one of the co-founders explains their mission “We help steel suppliers - producers but also stockists - to sell their excess material to a network of trustworthy steel professionals through online auctions published by suppliers. In addition, we also enable them to market their free production capacity.”
The customers of Vanilla Steel are steel producers and processors in Europe that generate excess material and are looking to efficiently sell this highly illiquid and difficult-to-price material. Excess material has no price tag attached by definition. Vanilla Steel helps suppliers to find a fair market price through online auctions. Every week, sellers can publish material and be matched with buyers that offer bids above their minimum prices. Vanilla Steel provides the details of the winning bidders to the suppliers and the transaction is finalized directly between the supplier and buyer on the pre-agreed terms.
A broad variety of excess material can be found on Vanilla Steel: overrollings, excess prime and semi-finished products with no customer order as well as declassified material that can be further processed. Stockists also use Vanilla Steel for inventory management purposes to sell slow moving material.
While most of the other online shops belong either to producers or distributors, Vanilla Steel is positioned as the only independent digital platform for the European steel sector. “Independence is a key to our successful launch. We are protecting the data we received and no competitors can have a claim on it.” confirmed the co-founder. The company was launched officially in June, had transactions from the first week onwards and now counts suppliers and buyers across 20 countries in Europe.