BHP takes top spot in brand value ranking
Brand Finance, a business valuation consultancy based in the UK, released its annual ranking of the most valuable mining, iron, and steel brands which highlighted the rebranding efforts of Australian mining company BHP. Its brand value increased by 29% to a hefty $5.1 billion in 2018. Other companies did not fare as well – Glencore, Vale, and Thyssenkrup took a significant hit to its brand value this year.
Last May, BHP unveiled a new campaign called ‘Think Big’, to establish the company’s role in Australia’s economy and community. The launch of ‘Think Big’ was at the same time as the company shortened its name from BHP Billiton to BHP. According to David Haigh, CEO of Brand Finance, China’s growing 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.”
Although still securing second place, Swiss commodity trading and mining company Glencore lost some traction since being the most valuable brand of 2017, with its brand value dropping by 11% to $3.7 billion. The reason for this steep decline was due to Glencore’s negative press after a mass data leak from offshore law firm Appleby. The International Consortium of Investigative Journalists (ICIJ) got hold of this information, and published “Paradise Papers”, exposing details related to Glencore’s operations in the DRC and Australia. Allegations against the company include criminal complaints against Glencore obtaining a copper mine in Congo, and cross-currency swaps, commonly used to evade tax payments. The law firm said, “Appleby has thoroughly and vigorously investigated the allegations and we are satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients.”
POSCO, a steel-making company headquartered in South Korea, also dipped 4% – bringing it to $3.6 billion and maintaining its third-place position from last year. Other significant developments include Baowu Steel, formed from the merger between Baosteel and Wuhan Iron, doubling its brand value to $2 billion. Aluminium producer Alcoa rebranded to Arconic and dropped 13 places after taking on a new direction to concentrate on designing and building processed metal parts. The waning of Alcoa-branded revenue streams made its brand value decreased by 57%.
Among the lower ranking brands on the list were Vale, a Brazillian mining company, and Thyssenkrupp, a German steel producer – decreasing by 11% and 25% respectively. Thyssenkrupp is embarking on a new joint venture with Tata Steel, as they merge under a new holding company based in the Netherlands – the impact of the merger on both brands remains to be seen.
The criteria for rating brand value is based on measuring enterprise value, branded business value, and brand contribution.