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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ShedSafe – An Industry Body or A Brand – Part 2?

Posted on : September 28, 2011

Shedsafe errors in the requirements of its members?

This Part 2 (of many to come) is basically regarding the accreditation requirements placed on its manufacturers of sheds that are Shedsafe Accredited. The first requirement that is outlined below is in regard to the thickness of the steel roofing utilised in shed construction. Prior to delving into this area – a brief explanation of the product flow is required of the steel used in the shed roof cladding .

The steel manufacturers process iron ore in a furnace to produce steel – very basic and this is then transformed into the many steel products available on the market. The roof sheet steel is in a coil approximately 940mm wide with a BMT (Base Metal Thickness) of 0.42mm which can have a Coloured paint coating or Zinc Aluminium Alloy. This coil is sold to the metal rollformers to run through a rollforming machine to get the required profile of roofing. These companies also rollform the purlins, battens, tophat, gutters, ridge cap, fascia, barge mould, gable roll and fold most of the required metal flashings. These are all rolled from an order from the shed manufacturer according to the shed being supplied. In some cases the shed reseller may be part of a large group and simply order direct from the parent rollformer.

So the rolled coloured corrugated roofing arrives on site (and all other parts) as a direct result from the customer shed order that has been designed, approved, manufactured, delivered and ready for erection. Your shed is also issued with a 15 year roofing, cladding and purlin warranty from the steel manufacturer also sometimes the parent company of the shed reseller.

Lets start with the quote to the customer from the shed reseller. You’ve given all the details of your requirements of a shed and accepted the quote. Here is a small sample of one such Shedsafe Accredited reseller that is also owned by a national Shedsafe Accredited Shed manufacturer.

 

Details of Roof Sheet Thickness

 

Notice the roof cladding is 0.40 TCT Trimdek Profile C/B. The Trimdek and Colorbond description is fine, the 0.40 TCT is the roof sheet properties – that is in this case a 0.40mm thick Total Coated Thickness or back to the earlier description is equivalent of 0.35mm BMT (Base Metal Thickness). So this is 0.07mm thinner than the normal roof sheeting that should be installed on a domestic sheds. Why do they supply this sheeting for roof materials on sheds? Because it’s cheaper and many people don’t know the difference! So Shedsafe accredited resellers and manufacturers have been through the extensive training and requirements of the ASI run Shedsafe group. In fact in one of their requirements of shed manufacturers to become accredited is the fact outlined above regarding product warranty for 15 years. Here is the item by Shedsafe that requires manufacturers and resellers to:

 

15 Year Roofing Warranty

 

So the Shed Industry Benchmark group of Shedsafe – is setting the target or requirement of a 15 year warranty and its strick accreditation process is followed by all of its members. So the sample above (a shed which was supplied in 0.35BMT roofing) will have a 15 year warranty? WRONG.

Now lets look at Shedsafe again, an industry body run by the ASI of which BlueScope is the major sponsor. BlueScope also manufacturers the steel coloured coil for these very same Shedsafe accredited manufacturers and resellers. So lets examine the warranty for 0.35BMT roofing use in sheds.

 

 

BlueScope Roofing & Cladding Warranty

 

The main part in this warranty is that the supplier of the steel will not give a warranty on the 0.35BMT roofing that can be found in part 1 of the terms and conditions of the BlueScope Shed & Garage Warranty.  The basic error is that the BlueScope run ASI and its ShedSafe group have not covered all the small detail and continues to stipulate that Shedsafe accreditation is the Industry Benchmark. If they cannot enforce a simple base metal thickness that the manufacturer stipulates – what else is also wrong?

If your shed is supplied with 0.35BMT (or 0.40TCT) roofing – then it is not covered by the BlueScope warranty and the shed reseller will have to provide an independent cover for this warranty. Will they provide a 15 Year warranty on a 0.35 BMT thick roof sheet?
Accreditation is a simple word that enforces the meaning of having all the checks and processes in place to eliminate error.
This is one error that Shedsafe has to correct.
Next week part 3 – more detail of the marketing group Shedsafe!
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Steel shed price Rise

Posted on : September 19, 2011

Steel Price Rise Due in next 3 to 7 Weeks

BlueScope Distribution has notified customers of an impending two tier price rise in the coming weeks. It involves a base steel rise of between $60 to $120 per tonne on most product groups. As well they will be implementing specific surcharges to recoup key costs. These surcharges will be provided shortly.

 

Steel Shed Prices will rise with Australian Steel?

 

This comes after a significant bonus of over $3 million was paid to Key BlueScope Management (11 people) as a reward for leadership – not profit incentive? The notification states that volitilty in steel prices, rising labour costs, rising freight costs, rising processing costs, rising warehouse costs, and a rise in general utilities are the reasons. Along with the iron ore and coal price increase that has caused the steel price rise – the others will be included in the additional surcharges.

They state they have begun to receive notice from their steel suppliers (BlueScope Steel) of pending price increases. This does not look good for further sales of BlueScope Steel in the shed industry. With imports on the rise at cheaper prices currently – this price rise will further erode steel sales by BlueScope.

It will also follow by a notification by One Steel on its price increase – so many of the big shed manufacturers will be importing direct to keep competitive in the shed industry. Many of the big reseller shed companies will want to lock in prices for as long as possible to avoid this increase. Negotiations are already occurring between some of the big rollformers and BlueScope, along with talks between rollformers and shed companies.

 

Have you been told of this price rise?

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ShedSafe

Posted on : August 31, 2011

Does ShedSafe guarantee that your shed is in fact safe?

No. If your shed complies to The Building Code of Australia then your chances are far higher.

Does ShedSafe publish or contribute to the Building Code of Australia?

No. It copies large slabs of it in the “Design Guide Portal Frame steel sheds and garages”.

Does ShedSafe own or contribute to the AS/NZS 1170.2 2011 (Structural Design Actions : Wind Actions)?

No it was prepared by Joint Technical Committee BD-006 and was approved on behalf of the Council of Standards Australia on 23 November 2010 (published on 30 March 2011).

Who owns ShedSafe?

Shedsafe is owned by the ASI (Australian Steel Institute). The ASI was started using some large grants from Bluescope and Stramit.

Has ShedSafe ever rejected an applicant?

There have been no documented or rumoured rejections. Not bad for an accreditation that has to be earned and can’t be purchased.

Is ShedSafe Independent?

No.

How is Shedsafe funded?

Shedsafe is a commercial operation, that is used to fund the wages of the operators. ShedSafe charges the shed suppliers (those that have the software and organise the materials) to have engineers review three of their shed designs. Now of course these three designs are not their typical shed, they are over engineered and would be under the meticulous watchful eye of the shed suppliers engineers. This does have the potential to pick up glaring errors, but as far as being representative of the typical shed supplied, there is no way!
To further increase the money revenue potential, ShedSafe charges around the $500.00 mark to each of the shed sellers or distributors. How does this shed seller accreditation get earned? Sit a simple test, a pop quiz on the AS/NZS 1170.2. Again ShedSafe is earned not purchased. Rubbish!

Is ShedSafe a Brand or an Accreditation Scheme?

It is clearly a Brand. Accreditation is a quality assurance system of all processes that ensure the end product is safe and sound – the Shedsafe system of accreditation does not achieve this.

What do Shed Suppliers and Sellers think of Shedsafe?

They think it is a necessity as if your competitor has it then you will loose sales as the consumer is being mislead.

What do Shed Buyers think of ShedSafe?

They think it is a regulatory body equivalent to the BCA or Australian Standards. Wrong, wrong, wrong!!!!

Is Shedsafe going to protect consumers?

In its current state there is no way consumers will be protected.

Does Shedsafe ensure a 15 year product roof warranty?

No – not even its benefactor does a warranty on 0.35BMT roofing, which is being supplied by some Shedsafe accredited members.

Are Shedsafe accredited suppliers allowed to use 0.35BMT on their roofs?

This is the key to this whole business, some do and some don’t! Shedsafe does not provide even basic consistency in shed supply.

 

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Alternative to the CO2 Carbon Tax for the Steel Industry

Posted on : July 18, 2011

The current development of furnaces for steel manufacturing is changing – but not in Australia. BlueScope and One Steel cannot compete with the giants in Asia, USA, India and Europe.

The answer is a non coal fired furnace – called an Electric Arc Furnace – the images below are copied from mainly sites in China and India. The use electricity to produce molten iron used every day in the steel industry.

 

Electric Arc Furnace

Electric Arc Furnace Diagram

Electric Arc Furnace 2

Electric Arc Furnace 3

As you can see this is not dissimilar to providing the required temperatures to liquefy Iron Ore Oxide to Iron (steel) plus lots of other very technical processes. But the great thing about this it reduces the CO2 emissions by 50% plus (to be confirmed) but the source of power is excluded in this exercise. All of Chinese, Indian, American and European Steel producers are going down this avenue. It will become the dominating source of steel while the CO2 emissions are a problem to the globe. Why is Australia not looking at this technology – because coal is cheaper than the extremely high power charges already being charged? With the introduction of the Carbon Tax on Power Stations and Steel Manufacture – this technology will not be available to Australia and we will become the third world manufacturers (polluters of CO2) and eventually shut majority of these manufacturing companies down.

WHY? Because power is already expensive and will become more so with the CO2 Tax Introduction. How does Australia make power? The majority is coal and the government will make a fortune in revenue from this CO2 Tax along all supply lines. Why would they invest in alternate sources of power that do not produce any CO2? Because there isn’t a tax on it yet! What is this magical power supply that doesn’t emit any CO2?

 

Nuclear Power Stations

The below is a photo of a power station in Europe (includes Russia) that are simply producing large amounts of energy without the CO2 poisoning of the atmosphere.

Nuclear power plant

How do these magic power stations work – people in Australia haven’t seen one here because they are banned and will be for a long time with the sentiment that has been placed in this country since the early 1970’s. Nuclear Energy is very different from Nuclear Bombs! Have a look at the world today that uses nuclear power.

 

 

 

 

 

Nuclear power plant usage

 

The grey areas (that include Australia) have no reactors – WHY? Because of the fear that we will all die if something goes wrong. Nearly 40% of the world’s landmass population has access to nuclear power! We don’t and will not until there is a big shift in the acceptance by the Australian public of this power source.  If education is the key – then lobby groups from manufacturing industries will have to provide the input to start this process.

 

Australia Needs Affordable Power to Sustain its Economic Viability in Steel Manufacturing.

How can BlueScope and One Steel change (or even afford to research and develop) to this new technology? The simple answer is they will not. The CO2 Tax has just wiped it off the R&D board’s agenda at the annual production sustainability meeting. Australia cannot supply power for this process without utilising coal or gas. Wind, Solar, Geothermal, Wave and other renewable power supplies don’t compete with the economical supply of base load power that exists in Nuclear Power Supply.

Australia says on one hand – don’t use Nuclear power – but then says you pollute too much CO2 into the atmosphere – what are the steel companies going to do? Unlike TATA and other world steel giants they can’t use nuclear power from companies in China like the CHINA GUANGDONG NUCLEAR POWER COMPANY which supplies fuel (uranium fuel cells) to all of Chinas nuclear Power Stations. Where does the China Guangdong Nuclear Power Company get its Uranium Ore from? ANSWER is Australia. Aren’t we very clever? Sell it but don’t use it! The next good part of the story is that Energy Metals a 60.6% Chinese / Australian company was just granted a licence to export uranium from the Northern Territory to China for the next ten years.

 

WHY?

The questions raised are:

  • We can sell uranium for nuclear power but not to Australian companies for power production in Australia.
  • Over 50% ownership (by other countries) of uranium mines is allowed in Australia and they can sell it to whoever they want.
  • Nuclear power is very bad in Australia – but so is coal – we have to use wind, solar etc.
  • Cheap power, no CO2 polluting power (nuclear) and cheap, CO2 polluting power (coal) is not an option in Australia because one is banned and the other is taxed till it is no longer affordable.
  • How will the big manufacturers in steel, cement aluminium etc afford to develop new technology or even adapt to new technology if this CO2 tax is introduced.
  • Will everyone accept cheaper imports of overseas manufactured steel product to utilise in building etc?

How many manufacturing groups, associations, industry groups, federations, lobby groups etc are actually interested in saving this steel industry? I will be publishing a list of each group involved directly or indirectly of their involvement to date and also their intended involvement including “no comment” over the next few weeks.

This industry employs (directly & indirectly) the vast majority of Australian workers and this Tax and also the Ban on Nuclear Power will leave us behind.

I will leave you with two images – pick which ones are Australia and which one is China?

Australia

 

 

China

 

Where do we want to be in 100 years? 500 years? China is planning for the end of 3000 not 2012 like Australia.

Here’s the roofing perspective of all this – maybe pictures are easier to see the comparison?

The big question is which one is Australia and which one is China? A or B?

Picture A

Picture B

 

Email your answer to shed@shedeye.com.au and also if you require further technical data regarding this report or an RSS feed setup to your email address?

All industry Associations, Federations, Lobby Groups, Institutes or other interested parties please leave contact details at the above address.

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Concreting before or after The Shed is erected

Posted on : May 10, 2011

The following question has been posed on the Shedeye forums.

I have purchased a 6 x 6 single roller door shed that I am erecting and have to do my own slab. Some people told me it’s easier to pour the slab after the shed is built and it covers all the holes in the wall sheets. But the shed supplier told me to pour the slab first as the steel sheeting supplier warranty would be voided as direct contact with concrete rusts the sheets.

Which one is right?

Concrete, due to the high alkaline, will rust colorbond quite quickly.

Take heed as the advice from bluescope is

Erecting the shed prior to the concrete slab being poured, consequenty using the steel walling as formwork, is not recommended.  The predominant problem associated with this poor practice is accelerated corrosion due to:

  • Contact with wet cement, which is strongly alkaline.
  • Shrinkage of cured concrete enabling the build-up of dirt and debris in the gap left between the slab and the wall.

(bluescopesteel website).

In addition to the above advice, you should maintain a free drip edge, this is very important otherwise you get a build-up of water at the cut edge of the steel, and rust is guaranteed!

As always there are exceptions to the rule, and some of the best shed companies and builders do in fact pour the slab after the shed is built, the techniques used to achieve that are destined for another article!  The owner builder should stick with the advice in this article.

 

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Reflecting on Reflectivity

Posted on : April 6, 2011

Shedeye has questioned the ambiguity of the SEPP definition of “low reflectivity” and is going to expand more on this.  This article will explain the standards and map them to each other.  For a complete discussion go to the Shedeye Investigator  article.

The current requirements of reflectivity standards of metal cladding as seen in BASIX, BCA and SEPP all seem too ambiguous for correct applications and on site judgement and analysis. As explained below, the variations of each of these regulatory bodies will be apparent especially in the Class 10a or domestic shed/ garage construction and manufacturing industry. What are solar absorptance, reflectivity, gloss levels, heat transfer calculations, R Values, BASIX Scale, BCA Scale, and visual acceptability? All these factors play a role in the decision of colour choice (or ZINCALUME ®) of your shed metal cladding and roofing.

The standard by each authority vary and will cause some problems within the industry along with questions for the Building Certifier during the approval process. These variations on the choice of colour may affect the outcome of approval depending on which code is followed and whether or not the local council regulations agree or disagree with these codes.

Why is there a contradiction among something on coloured steel cladding when each colour has its own Solar Absorption Index Value? The reason for this is simple – each building (Class 10a) should be inspected individually prior to this decision of colour being made, to evaluate the different aspects of the codes above and the influence each requirement has on the following:

  • Visual Suitability (impact on neighbours)
  • Environmental Considerations (energy saving)
  • Personal choice (What colour you want?)
  • Building use (aspects of comfort levels within the building)
  • Building position (in reference to location of other building and aspect of sunlight etc)
  • Local Council requirements (necessary for approval)

 

Shedeye Reflectivity Scale Comparison Chart

 

Colour Colour Solar Absorption SEPP Classification BCA Classification BASIX Classification
STEEL COLOURS
Classic Cream ™ 0.31 Not Acceptable VL L
Surf Mist ® 0.318 Not Acceptable VL L
Paperbark ® 0.421 Not Acceptable VL L
Evening Haze ® 0.427 Not Acceptable L L
Shale Grey ™ 0.433 Not Acceptable L L
Sandbank ® 0.455 Not Acceptable L L
Dune ® 0.466 Not Acceptable L L
Windspray ® 0.584 Acceptable D M
Pale Eucalypt ® 0.597 Acceptable D M
Bushland ® 0.619 Acceptable D M
Headland ® 0.632 Acceptable D M
Wilderness ® 0.651 Acceptable D M
Jasper ® 0.682 Acceptable D M
Manor Red ® 0.688 Acceptable D M
Woodland Grey ® 0.706 Acceptable D D
Loft ® 0.711 Acceptable D D
Monument ® 0.732 Acceptable D D
Ironstone ® 0.743 Acceptable D D
Cottage Green ® 0.746 Acceptable D D
Deep Ocean ® 0.749 Acceptable D D
PLAIN
Zinalume ® ? 0.35 Not Acceptable VL L
METALLIC
Citi ® ? 0.55 Not Acceptable L M
Axis ® ? 0.55 Not Acceptable L M
Conservatory ® ? 0.55 Not Acceptable L M
Skybridge ® ? 0.55 Not Acceptable L M
Cortex ® > 0.55 Acceptable D M
Facade ® > 0.70 Acceptable D D
COOLMAX
Whitehaven ™ Not Acceptable VL L

 

As this spreadsheet describes the colours taken from the BlueScope website and lists four factors that are currently used in the building industry. How these play a part in colour choice for metal cladding on these buildings requires an understanding of each of the columns above. There are as follow:

  • Column 1. This is simply the list of ColorBond Colours, ZINCALUME and Metallic Colours from BlueScope.
  • Column 2. The Solar Absorption is simply a numerical index that shows the amount of solar “radiation” that is absorbed by that particular colour. This is not to be confused with reflectivity and the two are not inversely proportional to each other.
  • Column 3. SEPP is the body of government in NSW that has legislated the requirements of colour to be used in Class 10a buildings. The requirement is based on reflectivity and although not exactly stipulated – it only accepts Medium or Dark colours (low reflectivity).
  • Column 4. BCA has its own version of classification of colours in this list and refers to Very Light (VL), Light (L) and Dark (D).
  • Column 5. BASIX is the New South Wales Building and Sustainability Index body with its own colour classification and is as follows: Light (L), Medium (M) and Dark (D).

 

BASIX Solar Absorptance Scale

The BASIX scale is based on the following and is linked directly to the value of solar absorption index.

This can be located at http://www.basix.nsw.gov.au/docs/ under Thermal Comfort Protocols.


The Building Code of Australia (BCA) Colour Classification.

BCA has classified roof colour also on the basis of their solar absorptance, and referred simply as light, very light and dark. Very light is below 0.425 solar absorptance, Light is below 0.550 solar absorptance and Dark is above 0.550.

 

SEPP Colour Acceptance Scale.

This is quite simply stated as must be “low reflective material”. Being low reflective can only be Dark on the BCA Scale or Medium and Dark on the BASIX Scale. For the purpose of this investigation – the BCA scale has been used as this code is generally utilised by all local councils and Building Certifiers. The problem is not the cut off area – but simply in the statement of “low reflective material”.


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The End of Steel Manufacturing in Australia

Posted on : March 6, 2011

Shedeye previously printed Shed Prices to go sky High, it was clear that the steel manufacturing sector in Australia is under serious threat with the introduction of a Carbon tax on the industry.  Shedeye then showed the cold hard science behind the Steel shed industry and carbon.  Shedeye also proposed that rather than a tax, perhaps all ozzies with the room in their back yards should plant a gumtree!

Bluescope has responded to the threat by sending media releases to both the smh.com.au as reported Bluescope seeks exemption for manufacturing and www.theaustralian.com.au as reported Carbon tax plan threatens viability.

BlueScopes Steel managing director has stated

“The test has to be: can the price be passed through . . . if the price is not paid through, it is basically the end of steel manufacturing in Australia,”

and

“For emissions-intensive trade-exposed industries there should be no cost until our competitors face a cost and there certainly shouldn’t be a free ride for imports that sees manufacturers have to move their operations offshore and hide carbon in someone else’s backyard.

If the manufacturing sector does not get an exemption is the government going to impose tariffs on imported steel?  What a mess.

While BlueScope is in the business of making money and this involves lobbying and looking out for their own interests before all else, this is a clear case of the general public’s best interest.

The industry is threatened via big increases in shed prices, the disposable income of Australians is in serious trouble and even when the government starts to allocate the funds from the carbon tax (inefficiently and no doubt misappropriated), the damage may well have been done.

 

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Shed Prices Rise, again!

Posted on : February 22, 2011

Just when you think that there can be no more steel shed price rises, you can think again, shed prices are on the rise again, and the steel manufacturers have stated that there are some more significant rises to come in 2011.

Shedeye showed that the January shed price rise was insignificant and for a standard 6 meters wide * 6 meters long * 2.4 meters high shed or garage you were in for less than a hundred dollars shed price increase.

The March price rise is set to hit the shed price a great deal more as it will directly impact the price of everything excluding colorbond products (January only effected colorbond products)

The list of effected products are

  • TrueCore – Roof Battens
  • Galvanised – Formwork, Accessories, Purlins
  • Zincalume – Roof and Wall Sheeting, Accessories, Top Hats, Flashings, Downpipes and Gutters.

The average price rise is approximately 10% and as these products make up most of the weight of a shed, you are going to see bigger shed prices or garage prices after March.  The shed price is all about the weight of steel that is used to construct them.

As has been previously shown Bluescope has a virtual monopoly within the shed industry, and the question needs to be asked,  is Australia paying too much for its steel sheds as a result?

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The Shed Duopoly Monopoly

Posted on : January 27, 2011

Shedeye has conducted analysis[1][2] on Australia’s Shed Distributors, and their link to wholesaler’s and manufacturers.  The results are surprising and show that while there is a good degree of competition in the distributor[3] and wholesaler[4] sector, the manufacturer [5]sector is exclusively tied to Bluescope as a source of their steel.

The graph below shows that Bluescope has dominance on the shed distribution chain and hence will have significant pricing power.   The “Unknown” comes from ambiguity in some of the manufacturer company reports as they source some of the Cold Rolled steel from Bluescope, however it is not clear how much they source from China or elsewhere, it could be the “Unknown” quantity falls to Bluescope.  As you can see there are few distributors that do not directly or indirectly source their products from Bluescope.

This graph shows that even in Roll Forming Bluescope has significant market dominance across the distributors of Australia.  This again shows that the competition is almost limited to a duopoly and the barrier to entry is very high due to the vertical integration of the supply chain and the high capital costs associated with this process.   Titan Sheds and Garages has made successful inroads into this arena, using its distributor network in QLD and NSW to successfully become a specialized shed roll former in their own right.

This looks much more promising from a competition point; however when you take a closer look into who actually owns the largest distributors, some layers of the onion start to unfold…..  Stramit owns both Fair Dinkum Sheds and Garage World, while Lysaght (Bluescope) owns Ranbuild.

This shows that the independents own just less than 50% of the distributor market and the two big players have slightly over 50%.

An extremely interesting market when you look at this.  Bluescope has vertical integration from the production of their Cold Rolled Steel, Roll Forming to distribution.  However, nestled in each stage of the supply chain they have a wholesaler division that is servicing other companies.  A very interesting and a very powerful pricing position indeed.  Micheal Porter would be proud of Bluescope for ticking off each one of his competitive advantage points!

There are quite a few things in Bluescopes favor regarding price rises and sheds

  • Sheds are still a multiple cheaper than the substitute products of brick and steel.
  • Steel is well suited to Australian climate
  • The supply chain with steel sheds is sophisticated and impressive
  • The simplicity of erection is hard to beat and results in quicker time to completion.

Does this indicate that sheds are more expensive than they need to be?  Are Steel price rises that are being passed onto the distributors reflected in the international steel prices and even iron ore spot prices?

Do you want more detailed analysis than this report provides?  Shedeye has a detailed report that gives state and geographical information on the shed distributor market in Australia.  Please contact support@shedeye.com.au to request this report.


[1] This report is based on the number of distributors and may not accurately reflect true steel volumes.  For example one distributor may be selling as much as 3 distributors by volume.  Comprehensive steel volume data is not available and is very difficult to ascertain accurately.  That said analyzing the links in the supply chain to distributors does give you a very good idea of market control and dominance.

[2] This applies only to custom designed sheds; prefab sheds such as Abasco and Spanbuilt are not included in the analysis.  Even though they do represent a good percentage of Shed sales in Australia.

[3] Distributors are the retail outfit of the Shed Wholesalers.

[4] The Wholesalers are the Brands or buying groups (Fairdinkum, Ranbuild, Garage World, Sidach, Titan) and they handle the sourcing of shed components, ordering from the manufacturer, the software and engineering.

[5] Manufacturers are defined as a company taking the raw Cold Rolled Steel product and Roll Forming it into a product.  Also commonly called Roll Formers.

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