New shed at Wacol raises questions!

Posted on : January 25, 2012

Queensland steel industry feels the heat from cheap Chinese suppliers

This the heading from the Brisbane Times Article on January 23rd 2012. Basically a local Queensland company has won the contract to build the new Hitachi Headquarters at Wacol. The uproar is about the source of the steel, of which Southern Queensland Steel (next door to new building) failed to win the contract to supply the builder Spaceframe with the steel!

Here’s a picture of the new site for Hitachi and the Spaceframe building sign out the front.

 

Hitachi Machinery New Wacol Headquarters Site

 

 Here’s what Mr. Ian Cairns of the ASI stated in the article:

The Australian company that lost the contract, Southern Queensland Steel, confirmed the situation but directed questions to the Australian Steel Institute, of which it is a member.

The Australian Steel Institute blames Chinese government subsidies and the undervalued yuan for creating an unfair advantage for Chinese suppliers over local companies and increasing pressure on an industry that employs about 100,000 people nationwide. 

So what is the answer to this? Here are some of the questions raised by this deal between an Australian builder and the chinese steel supplier:

  1. Spaceframe is a Queensland company with many projects under its belt, both here in Australia and in Asia and the Pacific. It also has offices in China (see their website above) and is a very progressive company (family owned & run). Why is that Spaceframe can obtain prices from China for pre cut steel and yet the giants of the Australian Steel Suppliers are unable to do this?
  2. Southern Queensland Steel has both local and imported products – if builders want quotes on large quantities of precut steel – then they should be able to offer the same imported Chinese steel supply! BlueScope imports steel, One Steel imports steel, Orrcon imports steel along with just about all major steel manufacturers.
  3. Why is the ASI (a part of BlueScope) suddenly blaming the Chinese government for all this. Surely among some of the ASI’s vast membership – one would think the buying power from China would be greater than that of Spaceframe?

Ian cairns of the ASI went on regarding subsidies and the value of the Yuan versus the dollar!

‘‘We’ve got an undervalued currency from a major competitor, and of course we have a resources boom that is fuelling our currency as well, to the detriment of manufacturers,’’ he said.

‘‘So we’ve got a double whammy, where you could almost argue that the dollar is overpriced by 30 per cent and the yuan is underpriced by 30 per cent.’’

‘‘So before we even start [competing] we are 60 per cent off the mark.’’

But Ian, surely your members would be better off taking advantage of this to supply steel rather than pay more for Australian steel and not sell it? The members of the ASI could definately buy at a better rate from China than Spaceframe.

Also the engineering and design for many of these projects are now being sourced from overseas and having multiply specifications that allow steel to be supplied globally. When local builders can source direct from China and it’s hugh number of suppliers, why can’t the steel suppliers also do this. Much of the material used in manufacture of the local domestic shed industry is imported. Maybe the steel suppliers of Australia will have to open up offices in China to combat these cheaper prices.

 

 

 

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3 Responses to “New shed at Wacol raises questions!”

  1. The Roofer said...

    Another great article Shedeye!

    ASI always has to blame someone else – never themselves.

  2. Chris said...

    Agree, the ASI really need to get their act together.

    Shedeye has anybody considered the creation of a co-operative in the interests of shed manufacturers, the industry and quality? ASI has too many conflicts of interest to achieve these goals.

    Food for thought.

  3. Dave said...

    Chris,

    Couldn’t agree more. the ASI has lived past its use by date – and now will cut back – especially funding to Shedsafe.

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