Government's R420-billion infrastructure spend, Eskom and Transnet's capital expenditure and a booming construction industry were key motivators for the AltX-listing of steel products company Battershill Steel Industries (BSI), CEO William Battershill said on Wednesday.

BSI listed over 719-million shares on the exchange and raised R157,6-million in a private placement of some 157,6-million shares at R1 a share before listing.

Battershill said that, despite some pressure on the market during the past two quarters, the large-scale infrastructural development projects were starting to materialise and this would stimulate steel consumption and facilitate the organic growth of the company.

He expected the sector to be "quite buoyant for at least the next five years", adding that steel demand would be strong.

He foresaw significant growth in the construction industry for the company and said that it would be increasing its structural steel range, which had already been on the market for about a year.

BSI also wants to enter the reinforcing bar industry by acquisition. However, Battershill said that he this would only be finalised by the middle of next year.

Battershill noted that the only potential cloud on the horizon was the manufacturing sector, which accounts for just over 50% of steel consumption, as it is affected by competition from imported goods, the threat of the Chinese market and productivity issues.

However, he believed the challenges could be managed, adding that the sector was diverse and that some manufacturers would benefit from the construction boom, as well as the revision of import/export regulations.

On the subject of manufacturing, BSI is currently overhauling (stripping and rebuilding) a slitting line to produce steel for the manufacture of automotive components. The new processing line will be operational in six to nine months and will allow BSI to ramp up this product range.

The group recently bought 23 ha of land in Meyerton and is currently in the design phase of developing a new premises where the processing and distributing activities, which presently take place separately in Alrode and Isando, will be combined.

Construction of the between 15 000-square metres and 20 000-square metres factory will start in February next year.

BSI's four primary activities include the processing of steel (slitting, blanking and cutting), providing stockist services to local clients, trading to bulk end users and exporting mainly to Zambia and the Democratic Republic of Congo's mining operations.

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