The Hot Dip Galvanisers Association Southern Africa (HDGASA) is now poised to benefit from opportunities generated by localisation and beneficiation initiatives. This is part one of a two-part article.

The executive director of the Hot Dip Galvanisers Association Southern Africa (HDGASA), Robin Clarke. Image supplied by HDGASA

The executive director of the Hot Dip Galvanisers Association Southern Africa (HDGASA), Robin Clarke. Image supplied by HDGASA

Over the past decade, South Africa’s steel value chain has been stretched to the limit with myriad challenges: from reduced infrastructure spend, conflicting policy implementation, to the global pandemic and more recently, national power grid supply challenges. However, the steel sector has proven to be very resilient, with strategically astute companies which survived the past decade determined to build sustainable businesses.

The executive director of the Hot Dip Galvanisers Association Southern Africa (HDGASA) Robin Clarke describes the Association as remaining “optimistic while staying realistic” in an industry which has recently been dealt another wild card: the announcement of the pending closure of the primary local steel producer ArcelorMittal South Africa’s two long steel products facilities.

“The HDGASA has a mandate to serve an extensive value chain including specifiers, architects and engineers, building and construction contractors, fabricators, steel specialists, galvanisers and end-users throughout Southern Africa.

As such, the association is a passionate, proponent and active supporter of local beneficiation – and is committed to developing and expanding the market for hot dip galvanising as the preferred corrosion control technology across a wide range of industry sectors. At the same time, the HDGASA is both a voice for its members and a commentator on industry trends and developments,” Clarke explains.

This includes analysing the government’s gazetted document, outlining 51 local content and industrialisation priority projects. “It is no easy task,” Clarke concedes, but makes the point that companies which have survived the myriad challenges of policy uncertainty, competition from exports, economic turbulence, an energy crisis and a pandemic, are well equipped this time around not only to survive, but to thrive.

“Yes, it has been tough – however in the local steel and galvanising sectors, we have improved agility and efficiencies. Difficult times have inspired businesses throughout the steel value chain to reflect, reinvent and improve – becoming far more ‘match fit’. There has recently been more pressure on policymakers to start delivering – the first tentative steps to start awarding infrastructure development tenders are indicative thereof. The galvanising sector is now well positioned to ride that wave,” he says.

A call to ‘do the right thing’

Clarke points out that the closure of ArcelorMittal’s two long steel products facilities requires a pragmatic view: “It is recognised that equilibrium in steel supply must be achieved through natural market forces. In light of this, we appeal to policymakers to ‘do the right thing’ from a strategic perspective and address the concerns of an equal playing field for all.

It is therefore of concern that the Department of Trade Industry and Competition (dtic) is heavily invested in the local mini-mills, and that strategic policy may suffer in terms of the requirement to safeguard these investments. In conjunction with the need to set enabling policies for the steel sector an acceleration in infrastructure spend is essential,” he explains, adding that tonnage is now at a threshold where many businesses in the steel value chain are struggling to cover overheads.

Another challenge is a potential influx of steel with wide variability in metallurgical and dimensional tolerances: “This raises the possibility that steel may be sourced to the lowest common denominator which is a cause for concern,” he says.

Commenting on how this affects the galvanising sector, Clarke explains that the large variations when it comes to metallurgy will impact negatively on the aesthetics of the galvanising finish. This presents a challenge when surface finish is a requirement, such as in the architectural market.