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Increased Interest in Structural Steel Exports, Especially into Sub-Saharan Africa

A major increase in the interest of South African based structural steel fabricators in the export markets has become evident during the past few months. This is according to International Steel Fabricators of South Africa (ISF) director, Neels van Niekerk.

“Since the middle of 2011 there has been a significant increase in companies applying for membership of the ISF,” says van Niekerk adding that there are four basic reasons for this.

1.    A number of fabricators have recently made major investments to increase capacity in order to be able to take part in the Medupi and Kusile power station projects. They are now becoming concerned as to what will replace this additional, created capacity, once the fabrication for the power stations is completed.
2.    Over at least the past decade, the South African mining industry dwindled in attractiveness to global investors. Today South Africa ranks 67th out of 79 on the Fraser Institute Mining Survey in attractiveness as a mining destination and new mining projects have become scarce. Fabricators are concerned that once all the fabrication for the new coal mines that will service the new power stations is completed,  there will be no new, substantial mining projects  taking its place.
3.    The global meltdown has also had its effect on South Africa. The number of local industrial and commercial projects requiring structural steelwork in the coming year is of growing concern.
4.    In contrast to our local scene, there are daily reports of increased activity in the mining as well as the petroleum and gas industries worldwide including in Africa.
Van Niekerk says that the African situation is enticing for South African exporters. “New coal mining in neighbouring countries such as Botswana and Mozambique is booming with Tanzania expected to soon follow,” he says “And the discovery and capacity confirmation of new offshore gas fields around all the other Southern African countries signal the start of a great new Southern African industry.

“The mining of precious and base metals in most of the Southern African countries is moving into a boom phase and the interest in the Uranium deposits of Southern Africa has never been higher,” van Niekerk says.

He adds that this positive outlook is the same for the countries of Central and West Africa, which are, in addition, also benefitting from a large number of iron ore mining projects. “And so the list continues,” he says.

According to van Niekerk, about forty countries in Africa have a higher estimated growth rate than South Africa and there is a direct relation between the steel consumption and the growth rate of countries. “It is no wonder there is such an increased interest in exports to these regions from the South African steel construction industry.”
“But it’s not only into Africa,” van Niekerk says. “Experienced exporters also service the new mining growth in South America and notably Chile and Peru with Colombia showing much promise too.”

Van Niekerk says that while the burgeoning growth in other markets entices our exporters, the current weakening Rand is a long-awaited and welcome contributor to the prospects of even further increases in structural steel exports. “Exports of fabricated structural steel exports (HS-code 37.08) dropped from a peak in 2008 of well over 200 000 tons pa and settled at an average of 150 000 tons pa for the following years. The ISF is confident that structural steel exports will reach the 200 000 tons pa mark again within the next 18 to 24 months as competitive and entrepreneurial companies position themselves to dedicate a substantial proportion of their fabrication capacity to exports accompanied by focused and aggressive marketing campaigns. These companies will undoubtedly survive the next decade, while the future of the others who are not that proactive, is more uncertain,” he says
.
The ISF is a marketing consortium of the leading South African structural steel fabricators, consulting engineers, steel merchants, allied suppliers and primary steel producers. These companies provide the full spectrum of services related to structural steelwork design, fabrication and construction – anywhere in the world.

In response to the increased interest in exports the ISF and its members took part in several marketing  missions and exhibitions in the past few months including ‘Africa Downunder’ in Australia, Extemin in Peru, Mining and Energy in Tanzania, Exponor in Chile, CIM & PDAC in Canada, Arminera in Argentina as well as visits to Mozambique, Zimbabwe, Zambia, Kenya and Ecuador.

ISF group events and missions planned for the next six months include countries such as Mozambique, Botswana, South Sudan, Uganda, Rwanda, Burundi, Tunisia (African Development Bank) Canada and Chile as well as our own famous Mining Indaba in Cape Town in February 2012.


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