· Rebranding strategy hits pay dirt as BHP becomes world’s #1 mining brand
· Swiss-based Glencore falls to second place despite strong financial performance
· Baowu Steel doubles brand value to US$2.0 billion, following merger
· Alcoa sheds over half of its brand value, dropping 13 places down the league table
BHP struck gold with their major 2017 re-branding exercise, as the world’s largest mining company’s brand value rose 29% to US$5.1 billion and took first place in the Brand Finance Mining, Iron & Steel 25 league table. In May, BHP launched its “Think Big” campaign following its rebranding from BHP Billiton to BHP, which focused on demonstrating the role of BHP in Australia’s economy and community. The rebranding appears to be paying off as BHP not only increased its brand value, but also its Brand Strength Index (BSI) score from 73.2 to 74.3 this year.
Meanwhile, the most valuable brand of 2017, Glencore, performed well financially over the last year, but its brand value dropped by 11% to US$3.7 billion. This is because the brand suffered significant erosion in brand strength from 62.9 to 55.3, caused in part by widespread mentions of Glencore in association with the Paradise Papers released in November.
Posco (down 4% to $3.6 billion) was able to retain its position as the world’s third most valuable mining brand, ahead of Rio Tinto (up 25.4% to $3.1 billion) which enjoyed strong brand value growth alongside higher iron ore prices caused by increased Chinese demand.
David Haigh, CEO of Brand Finance, commented:
“After the 2014 metal price crisis, caused by a drop in demand for raw materials in China, the industry is once again being shaped by the Chinese market. The country’s demand for higher-quality iron ore imports is benefiting the industry’s largest brands such as BHP and Rio Tinto. Challenger brands will need to define their competitive advantage to capture a greater proportion of the ever growing Chinese market.”
Baowu Steel doubles brand value following merger
The merger between Baosteel and Wuhan Iron and Steel has resulted in China’s biggest steelmaker – Baowu Steel – and fuelled the fastest-growth in the Brand Finance Mining, Iron & Steel 25 league table. Thanks to increased revenue, Baowu Steel’s brand value grew 103% to US$2.0 billion.
Alcoa drops 13 places down the league table
In late 2016, the sixth largest producer of aluminium spun off its mining and production unit into a separate company, retaining the brand name Alcoa, and rebranded the parent company, with a focus on designing and building processed metal parts, as Arconic. As a result of this reorganisation, brand value decreased 57% to US$613 million, largely due to a drop in Alcoa-branded revenues. Despite the changes, the new Alcoa’s share price has recently been boosted by higher aluminium prices. It will be interesting to see whether the brand will also be able to move up the ranking again in the future, as the recent brand restructuring cost it a fall from 10th to 23rd place.
Thyssenkrupp and Tata Steel seal the deal
An ongoing deal in the mining industry is one between Tata Steel, part of the Indian corporation that just turned 150, and the German conglomerate Thyssenkrupp. The two steel giants signed a memorandum of understanding that will lead to a joint venture, merging their respective European operations under a new holding company based in the Netherlands. Thyssenkrupp’s brand value decreased this year by 25% to US$2.0 billion while Tata Steel improved 4 positions with its brand value increasing 19% to US$725 million. It is not yet clear if the new entity will remain dual-branded but the merger will surely have an impact on the respective brands.
Scandal shakes Japan steel giant
Kobelco’s brand value decreased 15% to US$953 million, amid concerns over the quality of products it supplied for use in cars and aircraft. The scandal also saw the company’s stock to plummet more than 20%. The real effect will only be seen in the coming months as Kobelco’s clients such as Toyota, Honda, Mitsubishi, GM, Mazda and others, are still assessing the potential consequences for their vehicles and the overall confidence in Japanese industry standards.
Norway’s aluminium brand Hydro re-joins the table this year, after last appearing in the Brand Finance Mining, Iron & Steel 25 2015, surging 53% to US$605 million. Its brand value is expected to grow further through 2018 and beyond, following the company’s acquisition of Sapa.
Note to Editors
Every year, leading valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 25 most valuable mining, iron, and steel brands in the world are included in the Brand Finance Mining, Iron & Steel 25 league table.
Brand value is equal to a net economic benefit that a brand owner would achieve by licensing the brand. Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand.
More information about the methodology as well as definitions of key terms are available in the Brand Finance Mining, Iron & Steel 25 report.
Data compiled for the Brand Finance Mining, Iron & Steel 25 league table and report is provided for the benefit of the media and is not to be used for any commercial or technical purpose without written permission from Brand Finance.