This is the word from the Association of Steel Tube and Pipe Manufacturers of South Africa’s executive director Martin Done.
He says last year brought a boom in the market which, because of the nature of the platinum expansion, is not expected to continue in the same vein over 2003.
This year will, however, provide a number of opportunities for the association’s members, allowing the pipe and tube market to remain confident.
One such project is the Temane natural-gas pipeline which is being built by Sasol from Mozambique to Secunda, in Mpumalanga.
Construction of the $400-million, 865-km pipeline began last year and the first gas is scheduled to reach Sasol’s operations in Secunda by the first quarter of 2004.
One of the association’s eight members, Hall Longmore, has been awarded the contract to supply around 205 km of the highly-specialised pipeline.
Done says this will have a positive effect on the industry in South Africa, not only for the manufacturer awarded the contract and the steel supplier, Iscor, but also the industry in general.
This is the first time the manufacturer has produced such a product for the gas and oil industry and it required not only a high technical manufacturing process, but also required Iscor to develop a steel specifically for the project, known as X65 steel.
“This means we can now start looking for exports for the pipe in other gas pipeline projects around the world and Iscor can look towards exporting its steel.
“So, potentially, it has provided us with a new market,” Done adds.
The coming year also holds promise in a market that has traditionally been one of the sector’s biggest areas of opportunity, the water pipeline industry.
Despite the fact that for about four years no new water projects have been undertaken by the biggest builder of water pipelines, Rand Water, Done says the company now has a project on the cards due to start this year.
This previous lack of projects in the water pipeline industry has seen a number of spiral-pipe mills close temporarily, but Done is optimistic the new project will boost this area of the market.
The pipeline is part of a R450-million capital programme to be undertaken in the Rustenburg platinum area in the North West Province over the next three or four years and the pipeline itself will cost around R400-million.
The 80-km pipeline will run from Midrand, supporting Diepsloot, pass through Mnandi, Centurion and around the southern shores of the Hartbeespoort dam before going on to Rustenburg.
The pipeline is necessitated by the large number of platinum projects in the area, which has made Rustenburg the fastest-growing city in South Africa.
Another area of opportunity and growth for the pipe and tube industry is the plumbing industry – growth which Done says association members hope reaches into in the year to come.
To start off the resurgence in the plumbing industry, the association has been involved with its members in the development of a new product, which is to be launched later this year.
“The old steel pipe used for plumbing had become uncompetitive with alternative materials such as copper and plastic, so we have developed a much more competitive system,” Done explains.
The system is made up of a push-fit connector system (rather than the conventional thread-and-coupling system) which has led to the use of much thinner tube and a system overall which is more cost-effective, easier and quicker to install.
This could be the system that brings the welded tube and pipe industry back into the plumbing sector.
The connector was developed in conjunction with Marley Pipe Systems.
The association and its members have completed the product development phase, which included production trials, and is now looking towards the marketing of the product, which will be undertaken individually by each company rather than as a joint effort.
The members will not only be looking towards promoting the system locally, but Done says the product also has good export potential.
Despite the fact that the steel price increased by more than 50% last year and the fact that it accounts for around 70% of its members’ costs, Done says the industry has not been affected adversely by the increased steel price and he expects the price will come down over this year.
“We expect it to go down this year for two reasons.
“The first is the revaluation of the rand and the second is that we think that international steel prices have reached their peak and will now start to level off.
“We expect the price to decrease from the second quarter of this year,” he explains.
The export market has, over the year, been an area of growth for the industry, with an increase of 50% in the volume of exports over previous years and Done says the export market could be worth as much as R700-million a year.
Due to the fact that the export market is growing, a council, separate from the association, has been formed to deal specifically with the exporting of steel tubes and pipes.
The Steel Tube Export Council of South Africa was established in November last year, is being funded by Trade and Investment South Africa, and will work to bring more companies into the export tube and pipe market, as well as bringing more downstream products into the export market.