Trade wars costly to long-term construction projects

Owing to the global trade war in steel prices, local manufacturers, such as local steel fabricator Fabcon, are finding it difficult to quote for long-term construction projects. “The stockholding of any steel company is dramatically reduced, as companies are unwilling to hold stock for a longer period of time,” says Fabcon Steel director Andrew van Gool. As a result, fluctuating prices are putting pressure on design elements, which means that engineers have to design around what steel they can get, as opposed to what they want, he remarks. This has created an opportunity for Fabcon, which has “the added flexibility to service small and large-scale projects, unlike many large steel companies that have inherent limited flexibility”, says Van Gool. Fabcon aims to provide turnkey solutions based on engineering services in terms of drawing design and certification, followed by the actual erection of the structures required. This, he explains to Engineering News, gives the company a “leading edge in the market and sets a new benchmark for customer service”. Products are completed at Fabcon’s premises in Midvaal, which also has manufacturing capabilities. Van Gool cites Boksburg-based Grand Prix Models’ expansion project, which entailed adding another level to the existing structure for a restaurant and function centre. Fabcon constructed a curved fabricated steel structure to extend over this area, resembling a giant airplane wing. Fabcon’s involvement in this project was completed mid-October, with the grand opening of the new area at Grand Prix Models expected next year. Professional Crisis Akin to the steel industry’s frustration about fluctuating prices, Van Gool laments that there is a professional crisis in South Africa, with infrastructure development having stagnated in the country ever since the FIFA Soccer World Cup, held in 2010. This stagnation should, however, become redundant once President Cyril Ramaphosa’s Economic Stimulus and Recovery Plan starts coming into effect. Last month, during his maiden Medium-Term Budget Policy Statement, Finance Minister Tito Mboweni confirmed that expenditure of R32.4-billion will be reprioritised over the coming three years, in line with the stimulus plan. While this figure appears to fall short of the R50-billion reprioritisation target outlined by the President in September, Mboweni said that, coupled with changes to grant structure and in-year allocations, the combination of reprioritisations would amount to more than R50-billion over the three years. Faster-spending infrastructure programmes, together with a clothing and textiles production incentive and the Expanded Public Works Programme, will absorb R15.9-billion of the reprioritised budget. As a result, Van Gool states that abundant civil engineering projects will make a return as more roads and township developments, for example, will start. However, he does not share the same optimism about the glaring lack of skills being mitigated in the wider steel construction industry, with Fabcon having started to mentor staff and trainees to curb the effects of this. This initiative puts people on a two-week testing programme to explore their range of skills and areas of focus. Should staff and trainees have the basic skills and be keen to learn, Fabcon will induct them into its training programme, where they are partnered with a senior boilermaker and work under supervision for about a year. “The challenges from my side, in terms of skills, are focused on manufacturing skills, which we are trying to address,” Van Gool concludes.