As the custodian of steel industry knowledge and standards across Africa, the SAISC is calling for realistic planning. Gebremeskel explains: “We especially need to safeguard the future of the downstream steel industry, which employs over half a million people. It is well known that the steel sector has experienced quality and training issues for several years. However, this has now become even more relevant. Merchants do not want to inadvertently supply low quality steel products – and rejecting steel after fabrication or erection can be very expensive. From both sides, we need a more holistic, over-arching programme which caters to any eventuality.”

Steeling for change

Gebremeskel notes that the greatest risk remains the pervading uncertainty: “The well-publicised prospective closure of the primary steel producer ArcelorMittal (AMSA) long products division would have had massive repercussions for the automotive, construction and mining industries, amongst others. For now, however, this has been suspended - and the good news is that the ‘longs’ business is to remain operational.

However, the AMSA long products division remaining operational - but without firm lead-times - could introduce another challenge. Projects are planned months, if not years, in advance and any fabricator trying to ensure procurement of materials requires supplier commitment. Decisions need to be made now, Gebremeskel warns.

“With such uncertainties mini-mills which are already producing limited amounts of long products from scrap will come under increased pressure, as will merchants sourcing replacement supplies - not only from these local mini-mills - but also from many different countries,” he adds.

Gebremeskel believes steel could therefore be sourced from “anywhere and everywhere” - with importers searching for the best prices and most viable logistics. This, inevitably, brings up the issue of quality.

“For the foreseeable future, quality is going to be a significant issue in the steel sector. This dovetails with the question of human capital. With the loss of skills to retirement and immigration, are there enough people who can evaluate whether or not the steel is of good quality?” Gebremeskel asks.

He continues: “Fabricators will need to implement stricter quality control of steel. At present, this process is based on trust. Fabricators trust merchants, who in turn trust the mills. However, with the diversification of steel sourcing, this process must be rejigged. What initiatives can the industry afford - and in which direction will it go to address these challenges? We need quality training, supported by a stringent quality regime.”

Making its quality mark

With ever-greater pressure on steel merchants, mills and mini-mills to provide quality and adhere to standards, the SAISC’s proposed quality certification programme and quality mark will become more important than ever.

This first-of-a-kind quality certification oversight programme will refine, monitor and uphold quality standards across the steel supply chain - and will be signified by its own steel quality certification brand mark or stamp.

This is on track for roll-out within the next 24 months, Gebremeskel confirms.

Drawing from well-established international best practices, including US and UK standards, it  fills an important gap, he explains: “The SAISC has always recognised the dire need for quality standards monitoring and measurement for steel products and projects in South Africa - and, in fact, throughout the region. There is currently no independent regional assessment body to which the industry can turn for the measurement and enforcement of quality controls even on a professional, voluntary / self-regulated certification basis.”  

Poor quality comes at a high price

Gebremeskel adds that the entire value chain needs to be trained on quality because – as per the lesson of the national power utility failing to adhere to technical standards during the  construction of certain major power plants – due to the use of poor quality products, fabrication and erection can result in costs running into billions of rands.

“The final price tag on inferior quality materials and products is always much higher than if one took the time to gain the knowledge to ensure the correct quality is specified and delivered in the first place. The SAISC’s new quality certification programme aims to confront this challenge head-on and, eventually, uplift the entire steel industry,” he says.

The programme will involve the training of staff in all aspects of quality at companies that apply to quality for the SAISC quality certification stamp. This will be followed up by the Institute’s steel experts who will monitor product and project quality before a company can qualify for certification.

Stamp of quality  

As the future  of South Africa’s entire steel sector could hinge on quality control, Gebremeskel is calling for an ‘all hands on deck’ approach, with stakeholders integrating quality into their business strategies, working closely with the SAISC on training and promoting the use of the SAISC quality certification stamp.

“Our ultimate vision is for this to be recognised as the highest voluntary quality certification stamp on the continent. By obtaining the SAISC certification, companies throughout the steel value chain will be able to set the standard in Africa from a quality perspective - while also ensuring the sustainability of the critical downstream steel sector,” Gebremeskel concludes.