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Date : 05 March 2005

HIGHVELD Steel & Vanadium, SA’s second-largest steel maker, said yesterday that it would convert part of its production to higher grade steel, which it would supply to the market at no additional cost from May.

This was despite an increase of 7%-10% in the cost of producing the stronger steel, CEO Andre de Nysschen said yesterday.

What we forego in margin we expect to make up in volume,” he said. The availability of 17% stronger steel in SA was expected to yield substantial benefits for the struggling downstream industry, where some companies have buckled under the pressure of the rand and high steel prices.

South African Institute of Steel Construction executive director Hennie de Clercq said the move would boost structural steel exports as most projects abroad demanded the higher grade steel.

Highveld domestic sales manager John Ellwood said: “There is no doubt this country has lost contracts in the past because we didn’t have this grade.”

Highveld said the stronger steel meant that 17% less steel could be used in certain projects. It was hoped this would result in the use of steel in more projects.

Highveld said, for example, that the cement used conventionally in high-rise buildings in SA could be replaced with the higher grade steel.

About 70% of all high-rise buildings in the UK were built using cement about 20 years ago, with steel being used to build the balance of the buildings.

This situation has been reversed, and now 70% of all high-rise buildings are built using the grade of steel that Highveld is switching to, said De Clercq.

Highveld, SA’s largest supplier of steel used to make structural steel, said the conversion to higher-grade steel was made at a good time, given strong steel prices and the expected rise in construction in SA over the next few years as government stepped up spending.