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Jul 15, 2005

Significant growth for local steel fabricator

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© Reuse this South Africa’s largest private ly-owned and black economic- empowerment (BEE)-compliant structural steel fabricator, the Cosira Group, is experiencing significant growth and expansion as a result of increased expenditure in the petrochemical and power generation sectors.

The success of the company in being able to gain a foothold in these sectors can be found in the history and nature of the business, as well as the experience gained in the steel fabrication industry over the last few years.

Cosira has grown from a small family-owned company into a consolidated construction solutions group that offers all disciplines, including structural steel fabri- cation, supply and erection of the steelwork and mechanical and pipework components.

Similarly, through the years, the company has established an exemplary safety record, which has further enhanced its reputation in the industry. In fact, it was this exemplary safety record that paved the way for Cosira’s first foray into the petrochemical industry last year.

Petrochemicals
Following Sasol’s Project Turbo, all South African petrochemical companies have increased their expen- diture to end the production of leaded fuel by 2012.

As a result, there has been a surge in activity in this industry, which has led to more work for steel fabricators and construction companies.

Cosira is one steel fabricator that is particularly benefiting from the increased demands for the refurbishment of plants and construction of new plants around the country.

Last year, the company secured two separate contracts, one for Sasol, in Secunda, and the other for Sapref, in Durban. In the first of these, the Sasol Turbo Offsite Project in Secunda, Cosira was awarded the contract to do the detailing, fabrication and onsite erection of 1 400 t of steel on the Offsites and Outside Battery Limits (OBL) portions of the Sasol Project Turbo, which is sche- duled for completion this year.

The OBLs and infrastructure section of the Sasol Project Turbo provide the support to the inside battery limit (IBL) units, which are required to achieve the necessary processing and upgrading of the low-value feedstocks to support the changes in fuel specifications.

Much of this work involves piping, both for process interconnectivity and for utilities.

“Detailing for the project was done using state-of-the-art software including the X-steel computer-aided design (CAD) system,” explains Cosira’s MD John da Silva.

In the second petrochemical contract that the company was awarded, Cosira was commissioned to do all minor design work, detailing, procurement, fabrication, corrosion protection, supply, transportation and erection of all the structural steelwork at the Sapref plant in Durban.

Cosira began work on the project in October 2004 and completed the erection of the 903 t of structural steelwork in May this year.

“The contract included work in both the OBL and IBL sectors at Sapref in Durban with the four separate areas in the OBL already completed and more than 50% of the 14 separate areas in the IBL sector completed,” elaborates Da Silva.

“Most of the contract comprised medium to heavy steel support structures, which were fabricated from mild steel and hot-dip galvanised, for access ways to the isomeration unit’s distillation columns, pipework and high-pressure vessels.

“Out of 40 000 items only three had to be reworked, which is a significant benchmark for a structural steel fabricator.” The most interesting aspect of the project was that the design for the Sapref plant was undertaken in Poland, with electronic design data being sent directly to the detailing division at Cosira.

Receiving both hard copies and electronic data of the drawings in the form of structural detailing neutral files has meant that the drop-down 2D or workshop detail drawings were available faster than would have normally been the case. Both projects proved to be very successful for the company and were completed on time and within budget.

“Since the completion of the project, we have received accreditation from Sasol and are currently undergoing accreditation by Sapref,” says Da Silva. “The company’s intention is to expand into this sector of the market, especially with the accreditation, and will actively pursue projects within this sector.

“To a certain extent, this decision has also prompted the company to establish a representative office in Kwazulu-Natal because of the increased work within the petrochemical sector and because there is enormous scope in this region in the paper-and-pulp and sugar industries.” The company anticipates the open- ing of its new representative office during the last quarter of this year.

Mining
Within the mining sector, Cosira was recently awarded the contract to supply the fabricated steel for the furnace building for the prestigious Xstrata Lion Ferrochrome Project, in Steelpoort, Mpumalanga.

Civil construction of the furnace got under way in February this year, with the bulk of the construction work expected to take place during the last quarter of this year.

“Steelwork for the construction of the plant has amounted to some 4 000 t of structural steel to date,” says Da Silva.

The ferrochrome furnace building is about 175 m long and features various crane girders running the length of the building. The crane girders are manufactured using submerged-arc welding processes by Cosira, and, in some instances, are up to two metres in depth.

Transmission towers
Cosira has opened a new division in the company to cater for the current expansion in power generation and the construction of transmission towers.

“With all the infrastructural deve-lopment required both in South Africa and Africa, we have decided to establish Cosira Towers,” explains da Silva.

“This division will fabricate cellular towers for the African market and transmission towers for the South African market, and we think that the company is well-poised to handle the anticipated volumes.

Challenges
Cosira believes that the cost of labour in South Africa is a big issue in the manufacturing industry.

“This is one of the reasons why the company is investing a lot of money in capital equipment to maxi-mise turnover with the current staff complement,” says Da Silva.

“We need to be able to increase productivity and this is a good way to achieve this without compromising our critical mass.” The price of raw materials is also of concern.

“The fact that there is no stability within the industry when it comes to steel prices and we have to deal with short lead times for price increases is an issue,” contends Da Silva.

“Some of our contracts happen over extended periods and our prices have to be fixed despite fluctu- ations in the steel price.

“If we can stabilise the supply and price of steel, then the structural steel industry will see growth, and contractors will stop looking for alternatives to using steel in large structures,” concludes Da Silva.

Edited by: Jade Davenport
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