Cost-cutting measures have been forced upon companies that wish to remain in business in the steel construction and cladding sector, however, this could have a major impact on product safety and performance, with price considerations often taking precedence over quality and safety.
“Sociopolitical issues and uncertainty regarding the future of the country are real concerns in the business sector, with confidence levels dropping low in some industries. This is directly related to the lack of positive activity in South Africa’s steel industry,” explains steel gratings, stair treads, pressed floors, expanded metal and safety handrailing manufacturer Vital Engineering MD Dodds Pringle.
He adds that other factors influencing the current state of the steel industry include debates over South Africa’s mining legislation, the recent downgrade of the country’s global economic status, and the lack of response from government to the current situation.
Moreover, he notes that South Africa’s typical export markets are weakened by the Far Eastern companies, who have been making inroads into pan-African markets. These companies are able to compete favourably with South African companies, which must contend with unfavourable import duties and no subsidies. This is restricting South Africa’s ability to operate in a solid and stable fiscal environment and return to its previous competitive state in the steel industry.
“Import duties imposed on imported raw steel are not beneficial to local manufacturers, as downstream manufacturing industries are not being protected. The country’s high import duties on raw materials prevent local competitiveness against highly competitive, lower-cost finished goods imports,” laments Pringle.
He mentions that business opportunities are constrained by a failure to grasp the gravity of the current situation and the direction in which it is taking the country – to a cycle of higher unemployment, more serious crime levels and even less investment.
The above-mentioned factors result in the industry being forced to cut costs wherever possible, which compromises on factors such as quality. “If purchase price [becomes] the only factor influencing buying decisions, there is the risk that substandard quality will prevail as the standard.”
Pringle says, in an effort to make profits and stay in business, some fabricators are being compelled to produce according to lower standards. If lower quality is accepted as the general standard in the steel construction industry, this will have a detrimental effect on manufacturers who strive to offer quality products. Simultaneously, the entire industry risks potential failed or collapsed structures, which could result in injuries and fatalities.
Clients are responsible for making the final call on the contractors they choose, to insist and ensure that they are receiving safe, quality products, which perform in accordance with the claims associated with them, Pringle concludes.