Feb 25, 2011
Structural steel company optimistic about growthBack
© Reuse this
Structural engineering company B&T Steel warns that recent increases in steel prices, as a result of the flooding in Queensland, Australia, are having a devastating impact on the profit margins of projects for which prices were quoted in 2010.
The company, which designs and manufactures steel structures, says that the floods that devastated Queensland, which is a major exporter of coking coal, an essential steelmaking ingredient, resulted in increases in the steel price in January and February.
Further, it notes that the weather-related events in Australia have also led to shortages of certain steel products. “We find that merchants are on allocations and are only allowed to keep a certain amount of stock or purchase a certain amount of stock. Regular price increases from the mills also make pricing on jobs difficult,” says B&T Steel sales and marketing director Ben Dicks.
The company reports that one way to combat these issues is to carry stock, but it adds that not all companies are able to do so. Companies then also risk the possibility of projects being cancelled or delayed, which could further impact on the com- pany’s bottom line.
Meanwhile, the company reports that, over the past few years, the steel industry has dealt with, and overcome, many challenges.
It states that the steel industry showed a steady growth pattern in 2010, despite the fact that the market has become competitive.
“Last year also showed that the profit margins on projects are being minimised, which means that everyone needs to work smarter – a trend that is sure to resonate throughout 2011,” says Dicks.
“With the local market being so competitive and price sensitive, companies are beginning to look across borders for contracts. For some reason, South Africa seems to be excluded from the rest of Africa, as opposed to being part of Africa,” he adds.
Trading in Africa
Nevertheless, B&T Steel has a strong presence in Africa and, through good marketing, hopes to maintain and increase its presence. For this reason, the company also has a strategic marketing campaign in place that serves to create awareness among key stakeholders.
“We are currently involved in three projects in Angola, which includes a go-kart facility in Luanda, a warehouse and a workshop in Soyo and other mini warehouses.”
B&T Steel reports that it is also busy building a feed mill, in Mozambique, a manufacturing factory, in New Guinea, and a storage facility for explosives on a mine, in Sierra Leone. Two large projects that the company recently completed, include an automotive assembly plant, in Rosslyn, Pretoria, and a warehouse for agricultural biotechnology corporation Monsanto, in Lichtenburg.
“At B&T Steel, we are continually upgrading and improving our occupational health and safety management and, during 2011, we will be concentrating on obtaining our Occupation Health and Safety Advisory Services 18001 accreditation, which has great credibility in our industry,” comments Dicks.
“Currently, we find ourselves moving into a market that is competitive. We are tendering on some of the larger projects and we have invested in employing new staff and machinery to meet the demands of this market,” he says .
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Deputy Editor Online
Other Steel News
Latin America nonprofit steel organisation Latin American Steel Association (Alacero) in June announced that the global steel industry calls on governments to take action against China’s new steel policy, Steel Adjustment Policy, and overcapacity. The association...
Recent Research Reports
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
Energy analyst and EE Publishers MD Chris Yelland warned recently against excessive optimism regarding timescales for the proposed construction of new nuclear power plants (NPPs) in South Africa. He was speaking at a Nuclear Roundtable in Johannesburg. “I think we...
Malawi’s Lilongwe Water Board (LWB) is inviting eligible bidders to prequalify for the board’s efficiency improvement works, which will be implemented as part of the E24-million Lilongwe Water Resources Efficiency Programme. LWB CEO Alfonso Chikuni explains that...
CROATIA, AN EU MEMBER BUT NOT A TDCA MEMBER On July 1, 2013, Croatia officially became the twenty-eighth member of the European Union (EU). Despite Croatia’s accession into the EU, it is yet to become party to the Trade, Development and Cooperation Agreement (TDCA)...
The Council for Scientific and Industrial Research (CSIR) has announced that its new Inundu airborne electronics testing, evaluation and training pod had made its first test flight on September 10. The successful flight was undertaken from Lanseria International...
The Development Bank of Southern Africa (DBSA) – which disbursed a record R13-billion during 2015, from R12.7-billion in the prior year – remained optimistic that it could ramp-up loan disbursements to R25-billion a year by 2018 as it sought to give greater emphasis...