Pursuit of optimal performance
The local steel construction industry has to up the ante to make the most of project opportunities in Africa
While the magnitude of the mining sector’s recovery is subject to debate, the post-recession increase in mining projects throughout Africa – expansion or new – cannot go unnoticed. And one area in which this effect is being felt is in steel construction.
But are local firms making the most of the ‘boom’? If not, what could be stopping them?
The reality is that only a robust steel sector can adequately meet the rigorous demands of mining projects, and South African companies are adequately resourced. And nowhere is their ability more discernible than in the high number of large scale projects in which they are rendering their invaluable input.
However, two senior officials of The Southern African Institute of Steel Construction (Saisc) SAISC – Chief Executive Officer, Dr Hennie de Clercq, and Development Director, Kobus de Beer – believe the local industry is not performing to its optimal level, singling out two obstacles amongst others as poor or low adherence to fabrication standards and the impact of ‘cheap’ imports.
Adherence to standards
Adherence to fabrication standards is an area that seems to be ignored, unfortunately, though it is for the industry players’ own good to have a benchmark to guide operations.
Structural Steel Connections, a publication more commonly known as The Green Book, is a new book launched by Saisc to promote standardisation and reduce project costs and design time among steel fabricators, engineers and drafts- people. Written in 2011 by Saisc CEO Dr Hennie de Clercq, assisted by Saisc director Spencer Erling and Saisc development engineer Amanuel Gebremeskel, the bookdeals with the elements connecting parts, such as beams and columns, together in steel structures, including the design of the connections, their fabrication in the workshop and their assembly on the construction site. Additionally, it discusses how structural steel connections work and their required and actual strengths and basic connection agents, such as bolts and welding.
De Clercq compiled the book by researching connection concepts, theory and practice worldwide and applying that knowledge to situations that are likely to be encountered in practice locally. He clarifies: “Although international research was used in the compilation of Structural Steel Connections, the book is written for South Africans and it is based on the local standards in the steel industry.
“Engineers and technicians spend a lot of time designing connections. The book will promote standardisation, reliability, predictability and improved speed and accuracy of communication between engineers and steel fabricators, and it will reduce costs and design time, as it will considerably reduce the need for calculations,” he states, adding that the book is expected to make the design of connections simpler and faster and result in economical steel structures.
Impact of prefabricated imports
Kobus de Beer, the Southern African Institute of Steel Construction’s (SAISC) development director, notes that the introduction of the policy of ‘best country sourcing’ by many of the major South African client companies has had a noticeable impact on the local steel fabrication sector. “Best country sourcing means buying from the cheapest international supplier, which in many cases, turns out to be China.”
While the companies rationalize the practice by claiming that it is the only way of staying competitive with other global players, de Beer points out that what they naively overlook are the full hidden, associated costs, and the ‘massive’ price advantage ends up being a myth. “Many buyers also “forget” the 15percent import duty payable on imports of fabricated structural steel on entry into South Africa. A number of instances have been found where importers use fraudulent codes to try to avoid paying these duties.”
Furthermore, unfortunately, for those looking for bargain ‘buying cheap’ ends up ‘buying low-grade ’, as they might not always get the quality they expect.
Even ensuring they get good quality might end up being a logistical nightmare, de Beer notes. “Almost every major company buying from these foreign sources needs a full time resident quality assurance (QA) team on the premises of their suppliers and, often, a second team to fix the poor quality of the work. As technical communications are also a very real problem, major quality and scheduling issues are not uncommon. These issues have made countries like Australia move away from China as a cheap source of supply,” de Beer warns.
Clearly, the issue of where companies buy is out of the hands of the local steel construction companies. However, big corporations need to open their eyes: cheaper imports are not always what they seem. The intervention of relevant government agencies ‘could level the playing field’.
Market conditions indicate an atmosphere of gloom, which, directly or indirectly, is impacting on the steel construction sector. Conspicuously, this is evident in the recent poor results of South Africa’s leading steel producers which reflects a general slow-down over the last year or two in the demand for steel in South Africaand De Clercq does not see the situation improving in the short term.
In spite of the depression, De Clercq looks on the brighter side: “In the long term, however, there is much optimism as South Africa’s steel construction industry becomes more involved in supplying projects in Africa, a market which, on average, is growing at a rate of between 5percent and 6percent.” He believes managing the cost of steel and electricity as well as enhancing productivity could position local companies to make the most of opportunities in Africa.