Outside Trade & Investment Mission Zambia

The steel Tube Export Association of South Africa took part in the OSIM Zambia on 12-16 August 2019 in Lusaka, Ndola and Kitwe. The mission was well organised and executed through the collaborative effort of the Engineering Technology Group of Export Councils (ETGEC) and the Trade & Invest Africa (TIA) staff heading up the mission. The ETGEC drove the programme proceedings at both the Lusaka and Kitwe Trade and Investment Seminars with the help of TIA and the Zambian High Commission.  This was critical in ensuring that the requisite calibre of industry presenters from the South Africa and Zambian sides were part of the programmes.

Lusaka Leg of Mission

STEASA’s first point of call prior to even arriving in Zambia was to make contact with the Zambian Manufacturers Association (ZAM), we engaged with its President Mr. Ezekiel Sekele on how we can strategically start planting seeds on aligning some of our sectors for mutual benefit, i.e Zambian steel/ metal manufacturing sector with the Southern African Institute of Steel Construction (SAISC) on matters of certification, standards, lessons learnt from local content / designation, tariffs and very importantly steel education, matters that will inevitably lead to trade and investment opportunities. Our engagements with the association are ongoing.

STEASA engaged with Universal Mining & Chemical Industrial (UMCIL) the owners of the Kafue Steel plant in Kafue represented by Dr Julius Kaoma who presented the opportunities for investment available in the Zambian steel sector. In the pipeline was the development of a steel industrial park 15 km from the steel plant wherein investors could setup their steel fabrication factories and source input material in the form of steel angles, flat bars, round bars, reinforcing and billets from the Kafue steel plant. Three companies, namely Voidcon, Tamuda Steel & Pipe and Industrial Water-Cooling Solutions together with STEASA were taken on a tour of the Kafue Steel Mill.

Suscon Construction Solutions is a Lusaka based light steel frame building contractor we had a meeting with in Lusaka, who have been heavily involved in the construction of new schools and clinics commissioned by the government in various regions of the provinces. Voidcon, who offer a steel and concrete fused flooring system had a fruitful meeting with Suscon, proposing a solution to Suscon’s multi-storey flooring designs that are currently concrete intensive and therefor heavy. Voidcon will be afforded an opportunity to quote on future projects.

Sonar International is a steel tube merchant that operates in Lusaka and predominantly procures their inventory from South African steel tube and pipe manufacturers. Over the years South African steel tube exports have been uncompetitive relative to exports from other nations in the Zambian market i.e China and India, but due to geographical proximity, South Africa has remained the import nation of choice. Mr Binod Menon, Managing Director of Sonar International explained that Zambia has a massive informal market where cheap low-grade steel tubes and pipes are traded to this sector by unscrupulous merchants and price is everything and begets quality as the customer is none the wiser.

Our recommendation to the ZAM will be on how to promote the use of certified steel tubes and pipes in the Zambian informal market in an effort to ensure that end users purchase products that are approved by ZBS, therefore of good quality / durability and also inevitably ensuring ethical price competition within the Zambian steel market. The mainstay of this effort lies in steel education seminars and programmes.

 On the other end is the formal market where high grade and certified steel tubes and pipes are traded for input into construction projects commissioned by either the government or private companies where quality is key and a premium is paid. A market where Sonar, Macsteel and BSI belong to.

I met Mr Durban Kambaki, the Deputy Managing Director of Good time Steel (GTS), a $100 million Chinese steel tube plant investment in Lusaka that has Zambian Bureau of Standards Accreditation for their products. GTS produces, round, square and rectangular small-bore steel tubes for various applications in the light, medium and heavy industries. GTS has developed an equitable market share compared to the traditional imports that used to come from South Africa. This is indicative of the fact that South African manufacturers cannot expect to retain market share by merely trading in Zambia but rather by investing in manufacturing facilities. South African Seamless pipe exports to Zambia remain high and resilient against pockets of imports from China that are trans-shipped via Kenya and Tanzania.

Ndola & Kitwe Leg

On the sidelines of the Kitwe Trade and Investment Seminar, Voidcon and STEASA had a meeting with Macsteel Zambia MD Neil McMahon whom Voidcon had previous quoted on flooring solutions. The gist of the meeting relayed the very challenges the other steel tube traders lamented on of an unregulated informal sector dubbed “tax free sector” and the formal sector where price differences and quality are vast apart. Voidcon are in the process of negotiating a location sharing deal with Macsteel Kitwe at their new premises thereby creating a manufacturing integration process mutually benefiting both entities and offering a better alternative to current steel flooring systems currently in use in the Zambian construction industry.

Mr Sanjit Sampat from the Kitwe chamber of Commerce relayed in our meeting that the Copperbelt Province had many bridges in rural locations that needed to be replaced and some that required refurbishment. These antiquated bridges were typically made of concrete and have since weathered and washed away over the decades. Replacing these bridges with steel bridges would be the quickest and most efficient method that STEASA punted to the Chamber and Mr Sampat was in agreement. The challenge is that government coffers are under enormous strain which is reflective of the current Zambian economy that is beset with huge foreign debt repayments. STEASA and the Chamber will have to look at a viable way of raising funding for this potential project roll out. I will be receiving a detailed account of the bridges in question.

STEASA shared SAISC’s technical and commercial presentation on “Concrete Filled Hollow Structural Section” building technology with the Ndola Chamber of Commerce which its secretary Mr Joseph Malisawa has confirmed sharing with fellow chamber companies. This form of building technology is replacing the traditional way of building with concrete columns, but rather with steel pipes. We will be alerted of any high-rise buildings o factories where this technology can be incorporated.

Ox hydraulics situated in Ndola, who supply hydraulic solutions to the mines in the Copperbelt Province have found favour with STEASA association member Honingcraft Moser. Honingcraft Moser will supply semi-finished honed seamless hydraulic pipes to be further value-added by Ox Hydraulics. I met Mr. Raj Karamchand during the closed session the Export Councils had with the Ministers of the Copperbelt and North West Provinces.

Way Forward

 Speed and agility will be key in responding to enquiries received from the entities we have forged relationships with, definitely requiring a repeat visit within the coming months, i.e follow up meetings and presentations with ZAM and its metals sector members which I’m arranging regarding SA & Zambian Steel alignment plan.

D.M.M. Construction Ltd, based in Lusaka, is currently evaluating “Concrete Filled Hollow Structural Section” building technology for possible use in their future projects that require the construction of columns as ground support. We are in contact and have offered our technical assistance which would also necessitate a revisit at any project conception stage.