Steel distributor confident of overcoming steel industry challenges

28th February 2014

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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Steel distributor BSi Steel reports that it has fulfilled its aim of reaching growth of 28% in 2013.

“Although South Africa’s steel consumption declined by at least 6% in the domestic steel market, BSi Steel has been on a sustained growth drive, which has resulted in a material increase in tonnage and distribution footprint,” states BSi Steel bulk sales executive director Craig Parry.

He adds that BSi Steel recently increased its capability to supply tubing through the strategic acquisition of the Robmeg Service Centre, which was owned by Robmeg Steel and can now be found at the BSi Steel Kliprivier Warehouse, which is a 23 ha site to the south of Johannesburg. It houses a coil processing division and 30 000 m2 of warehousing, from where long and flat steel products are distributed across South Africa and overland into Africa.

The centre specialises in the cutting, forming and bending of steel-related products, and in the processing of steel sheets.


Owing to the expected growth of the automotive sector, Parry says the company expects flat products to outperform long products, but adds that if government makes a concentrated effort to roll out proposed infrastructure development, such as the Strategic Infrastructure Projects (Sips), it will affect the performance of long products positively.

The 18 Sips were established by the Presidential Infrastructure Coordinating Commission to address a variety of infrastructure needs in the nine provinces.

“When these infrastructural construction plans, which are steel intensive, are implemented, the market performance of steel will improve,” Parry says, noting too that a weaker currency will favour exports, as steel manufacturers and distributors will receive better prices for steel products.

Further, he adds that there is increasingly a positive outlook for the steel industry this year, but notes that the construction sector remains cyclical.
“Although we expect the cycle to trend back upwards over the next year, the effect on steel consumption over the last five years has been significant.”

Parry says challenges, such as pressure from imported Chinese products; the disruption of raw metal supplies, owing to unrest within the mining sector; wage costs undermining South African export competitiveness; electricity supply, which remains unpredictable, with tariffs set to rise; and the proposed national carbon tax, are “Darwinian challenges facing producers in South Africa”.

However, he notes that BSi Steel remains optimistic in its ability to adapt and overcome these challenges.

While the company’s aim is to establish market share through aggressive sales, new outlets, new investment in plant and machinery and greater investment in inventory, Parry says the company looks forward to a period of stability and more measured growth, with more focus on existing operations driving incremental improvements and efficiency to emphasise a greater return on investment from this platform.

BSi Steel has invested in building its development training academy over the last two years, at the Kliprivier site, to increase efficiency levels, skills and knowledge, Parry comments.

He adds that this year the company has already offered ten in-house training courses with an attendance of 330 people.

In addition, BSi Steel is the title sponsor of a two-day mountain bike race, which runs along the iconic Dusi Canoe marathon route, Parry concludes.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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