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Nov 18, 2011

Institute encourages greater cooperation

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The Southern African Institute of Steel Construction (Saisc) will promote increased cooperation and dialogue between itself, government and the steel construction industry, in general, to maximise opportunities in a tough global construction environment, says Saisc executive director Dr Hennie de Clercq.

“We live in a volatile world with histori- cal shifts taking place across the gamut of human society, including international and local business markets.

“The more we work together in dealing with the resultant powerful challenges, the better our chances of success,” he says.

He adds that, from a local perspective, the institute historically got used to going it alone without really concentrating on working with government, unless it was related to exports.

“We became proud of our independence and it worked for us, but we came to realise that global business is too complex for a single industry to succeed on its own any longer.”

“We will work towards changing this situation and will endeavour to interact much more closely with the various rele- vant government departments and the myriad other industries, with whom we have excellent working relationships, to see what synergies exist for deeper coope- ration.

“In short, we will do things differently in future and will encourage our industry leaders to do the same,” he says.
Meanwhile, despite the challenging times, the South African steel construction industry – through the civil engineering and building sectors – has performed surprisingly well of late.

“We know of only one bankruptcy in the steel construction industry this year and many firms have reported quite buoyant business activity for 2011 and a reasonable outlook for 2012.

“We have performed better than many other countries, including the UK, the US and Australia, where, in some cases, up to 25% of the steel construction industry is expected to be lost to bankruptcy in the near future,” says De Clercq.

He points out that there are a number of reasons for South Africa’s good per- formance.

“Firstly, the leaders and managers of our industry businesses are exceptional. They are generally very proactive in getting out there to get the business and they have been particularly successful at combating Chinese and other foreign competition.”

Secondly, State-owned power utility Eskom’s power stations have been a significant boost to the industry, taking up a good deal of its capacity.

Also, South Africa’s regional neigh- bours have been buoyant and South African firms have enjoyed significant volumes of cross-border business across a range of sectors, including mining, warehousing, factories, office buildings and more.

Thirdly, the recent weakening of the rand has improved the competitiveness of the local industry significantly. Besides this being a boost to the country’s ability to export, it is also helping to combat the practice of local companies importing fabricated structural steel from the East.

On the question of exports, De Clercq says that since marketing company International Steel Fabricators of South Africa (ISF) has been working with South Africa’s main contractors to bid on foreign contracts in conjunction with promoting local steel fabricators to main contractors on foreign jobs, significant strides have been made.

“We have always believed in promoting local steel fabricators to the main contractors on foreign jobs and, while this has been successful, focusing on helping South African main contractors to bid on these foreign contracts has helped as, when successful, they, in turn, are in a position to subcontract work to our steel fabricators,” he states.

De Clercq is optimistic about the ISF continuing to help open and develop new markets following this principle.

“When the ISF started to explore poten- tial opportunities in South America more than four years ago, there was scepticism about the successful outcome of the endeavour.

“But these efforts have paid off and have spurred us on to successful monitoring of opportunities in Australia, Europe and other regions, especially in the deep-level mining arena, where we are the indisputable world leaders.”

He adds that exports are fundamental to the survival of the local industry.

“They not only protect the industry from the ebb and flow of demand by being geographically diversified, but also, nowadays, everyone must do business wherever they can, with whomever they can, because that is the nature of the beast.

“In some situations, our customers become our competitors and in other situations our competitors become our customers. Sometimes we win local contracts from foreign firms and some- times foreign contracts from local firms and we would reject this way of doing business at our peril.”

Nevertheless, De Clercq says that his optimistic view of the current state of the local steel construction industry should not give the impression that there are not some real challenges that have to be met.

“One of these challenges is that, because of the problems ArcelorMittal South Africa has experienced with its blast furnace in Newcastle, there is a shortage of steel, especially the smaller profiles and reinforcing.

“As this is only expected to be solved by the end of 2011, the compounded shortage could affect the supply of steel into the future,” he asserts.

Another challenge is that while cer- tain activities are taking up a sizeable proportion of the industry’s capacity, there is still a good deal of capacity that must be used.

“We have to do whatever we can to take up this spare capacity or we face the risk of losing it altogether.

“Our clients must realise that this is an excellent time to build things. Prices of raw materials are competitive, con- sultant fees are lower than they have been for years, and the industry is blessed with state-of-the-art management, techniques and equipment.

“We have the potential to become a world player and everyone in the industry must play his or her part to realise this,” states De Clercq.
Meanwhile, he admits that while the institute’s role in this process is multi- faceted, it is clear that it has to continue with market development for the industry.

One of these important markets is the multistorey sector, where steel, through a variety of factors, is increasingly becoming a viable alternative to the more traditional construction materials.

“Light steel frame building is also having a particularly significant impact, as it helps to keep the weight down, while [ensuring] a structure of the highest quality from both an engineering and an aesthetic point of view.”

De Clercq says that, along with the rest of the world, South Africa is heading for challenging times.

“Uncertainty is the name of the game not only for our industry but for the world economy as a whole. It will take inno- vation and perseverance for the local steel construction industry to survive, let alone thrive. I believe we have what it takes to thrive, but it is going to require hard and, most importantly, smart work,” he notes.

Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
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