Jun 08, 2012
Steel merchant expands through acquisitionBack
Johannesburg|Richards Bay|Bell Equipment|Brown McFarlane Africa|BSI Steel|BSi Steel KZN|GM|KZN|Capital Equipment Manufacturer|Mining|Steel|Steel Merchant|Steel Plate Profiling Service Centre|Steel Plate Range|Steel Plates|Steel Users|Brown McFarlane|Lee Daff|Ross Teichmann
© Reuse this
Negotiations to acquire Brown McFarlane began this year and were finalised in April; however, the deal still needs to be approved by the Competition Commission, with a final ruling expected shortly.
The acquisition is expected to increase BSi’s product offering to specifically include Brown McFarlane’s quench and tempered steel plates, which will add to the company’s newly opened BSi Steel Service Centre division in Johannesburg, Gauteng.
The steel plate range is a high-strength, hard-wearing product range used in the mining and construction sectors, besides others.
The acquisition allows BSi to penetrate this niche market instantly, as opposed to slow organic growth, says Teichmann.
The acquisition will also benefit the KZN branch, as Richards Bay-based McFarlane is suitably placed to service one of BSi’s biggest clients – capital equipment manufacturer Bell Equipment.
The acquisition will also raise the steel merchant’s ability to service all steel users in the Richards Bay area.
BSi Steel KZN executive GM Lee Daff reports that, although it performed well last year, it aims to further position itself as a major steel merchant and enter new markets in the KZN region in future.
He adds that steel demand in the region has remained stable in recent times.
“The first quarter of this year has been quieter, in line with the usual cyclical consumption for the industry.
“January and February are quiet months but demand starts increasing in May. The demand pattern indicates a steady increase until September, reaching its peak in October,” he explains.
Teichmann says that the steel industry has experienced relative price stability in the last 12 months, unlike the period between 2008 and 2010. While price volatility appears to have stabilised, steel buyers are still aware of the risk of price volatility and are more inclined to take a conservative approach when buying steel.
KZN supplies mainly to the yellow goods sector – construction and earthmoving equipment – but it also supplies product to the manufacturing, metalwork, automotive and water utility sectors.
The KZN branch, being a stockholding branch, has a holistic approach in terms of its product range, says Daff.
“BSi Steel KZN stocks a range of products, in line with customer requirements, and adopts a just-in-time stock control system to save warehouse space and costs.
“The branch is an intermediary between the steel mill and the end-user. “Steel mills have very strict minimum order criteria and end-users generally require break-bulk quantities, which the merchant is able to provide.”
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines
Other Metals News
To spur the local steel industry to grow by at least 5% a year over the next 10 years, the Southern African Institute of Steel Construction (Saisc) will increase its focus on improving relationships with its counterparts in other African countries. Recently...
Updated 7 hours ago South African cement producer PPC’s acquisition of Safika Cement, announced during August, has been unconditionally approved by the Competition Tribunal. PPC acquired a 69.3% stake in Safika for a purchase consideration of R377-million.
Updated 7 hours ago Chilean drugmaker CFR Pharmaceuticals sweetened its cash and stock takeover offer for South Africa's Adcock Ingram to R12.8-billion, it said on Friday, to fend off a rival bid from a local firm. Santiago-based CFR initially offered R2.6-billion in cash and shares to...
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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 network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
Johannesburg-based locomotive solutions provider DCD Rolling Stock officially launched Phase 1 of its R240-million recapitalisation programme at its Boksburg manufacturing facility, last month.
Sales of electric cars should pick up once more such vehicles become available on the South African market, says Nissan South Africa (SA) chief marketing manager Ross Garvie. The local arm of the Japanese car company launched the country’s first fully electric...
Denel Land Systems’ (DLS) Mechem division is successfully marketing the latest version of its highly regarded Casspir mine-protected vehicle, the Casspir NG2000 series wide body ambulance. As its description says, this has a notably wider body than standard...
The infrastructure boom in Africa has seen investment in 322 megaprojects reach $222.7-billion, says professional services firm Deloitte in its ‘African Construction Trends’ report. Deloitte Southern Africa infrastructure and capital projects leader André Pottas...
ASME, the international engineering profession’s cooperative, educational and training, research, outreach and codes and standards development organisation (originally the American Society for Mechanical Engineers, founded in 1880), is seeking to improve the...