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The Southern African Institute of Steel Construction (SAISC) is in the process of convening a working committee to discuss and implement strategies for keeping the manufacture of power pylons local after its successful application for import protection
“Protection is only the beginning of the story. We still have much to do to ensure that this important sector is kept local,” says SAISC industry development manager Kobus de Beer.
De Beer says the volume of steel required for power pylons in this decade is significant. “A total of some 420,000 tons of power pylon steelwork is required up to 2020, peaking at 80 000 tons in 2012 followed by 50,000 tons per annum in 2013 and 2014. A further peak of 85,000 tons is predicted for 2017,” he says.
He adds that it is crucial to ensure that both the steel and labour are locally sourced. “South African companies have been manufacturing these power pylons for at least eighty years. During the past few years, however, cheaper power pylons of acceptable quality have been imported from the Far East, which has damaged the local industry,” de Beer says.
The main reason for this is that the fabricated products produced in Asian countries are being subsidised thereby enabling them to offer highly competitive prices delivered in South Africa. The proof is that steel sections such as angles and channels cannot be imported from the same sources at better prices than locally produced steel in spite of the fact that South Africa, during the 1990’s, agreed that practically all basic steel products as well as raw steel could be imported free of duty into South Africa. In recent years some 30 000 tons of fabricated and galvanised steel components were imported for ESKOM’s and neighbouring countries’ pylon requirements. “This is enough steel to keep at least two medium sized companies - employing 500 people going for a year,” de Beer says.
In fact, what transpired was that Babcock Ntukutuku, a power pylon specialist for decades, was eventually forced to close its doors and retrench long-standing employees due to lack of work and several other companies had to reduce staff while others simply did not enter the market. “The real concern,” de Beer says, “is that this establishes a pattern which is difficult to escape.”
The way forward is now being mapped out. A working committee of all affected parties is being convened by the SAISC and information on annual requirements for new pylons supplemented by the extensive requirements for refurbishment and upgrading of existing lines is being compiled.
“South African cost structures must be challenged,” says de Beer. “We will analyse in detail steel prices, pricing of galvanizing and productivity issues in workshops and improvements will be implemented.
“The objective is to help develop the South African power pylon industry to its full international competitive potential starting with the building of all our own and then most of Africa’s power lines in the face of relentless pressure from foreign competitors,” de Beer concluded.