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CONSTRUCTION WORLD
NOVEMBER
2015
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MARKETPLACE
“On average South Africa produces
about seven million tons of steel
per year of which about five million
tons is locally consumed.
He adds that China exported 100 million
tons of steel last year and has the capacity
to produce over 750 million tons. “It is not
uncommon for imported Chinese fabrica-
tions to land on our shores at a lower cost
than that of raw steel and there is a very real
possibility that practices such as these could
have a catastrophic effect, not only on the
South African industry but on the global
steel industry.”
Turning to local issues, Trinchero says
that each unit of the Medupi and Kusile
power stations required about 20 000 tons of
steel per support structure. “In comparison,
one large shopping mall such as the Mall of
Africa needed about 1 000 tons of structural
steel for its roof. So when we stop building
power stations, we will have to build 20 large
shopping centres to compensate for the lost
work from each unit. This is currently a very
real challenge,” he says.
“The current difficulties being faced by
STEEL CONCERNS
The Southern African Institute of Steel Construction
(SAISC) is concerned about the immediate future of
the local steel industry. This is according to SAISC
executive director, Paolo Trinchero.
the South African steel industry cannot be
over emphasised,” he warned, reminding us
of two key problems: the total lack of project
work and the unrestricted access China has
to South African markets.
Trinchero says the biggest challenge to
the local fabricators is order book. “Take one
of the leading fabricators in South Africa with
capacities of 24 000 tons per year. Its current
order book is 600 tons we are told. That is a
scary statistic! It is hard to imagine one of
South Africa’s largest fabrication facilities
running at 2% capacity.”
“The only opportunity left open to them
was to export. There are no more big
projects on the South African horizon
and the reality is they and others will be
retrenching a lot of workers unless we can
secure overseas work.”
“It is a tragedy that our local industry
is being decimated and it is surely in our
interests to support and protect it through
incentives. We are working closely with
government along the lines of the following
‘wish’ list which I have submitted”:
• Investor confidence is key and
government policy needs to create
confidence.
• Release work into the economy. Prioritise
and implement parts of the NDP that will
have the biggest impact.
• Encourage localisation. While this
is being done by the DTI already, it
needs to be embraced by SOEs and
large local businesses.
• Help team SA to generate a substantial
export revenue stream by looking for a
wide range of measures such as energy
inputs, logistics etc.
• Ensure the protection of the entire
industry from unfair competition
“We are encouraged by the latest initiatives
of the government, industry and
labour task teams. It’s tough times at the
moment for our industry, but we remain
confident that we will get through it,”
Trinchero concluded.
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