The South African arm of Duferco Steel Processing is focusing on Africa, South America and the USA, as European business has been hit by the financial crisis in the region, marketing manager Nico van Wyk told Metal Bulletin.
“We are export driven, but our focus has moved away from Europe because the market there is pretty dead right now,” he said. “The problems in Europe have certainly been affecting our bottom line. Who hasn’t been affected?”
Instead, the company now mainly sells to customers in Ghana, Zambia, Zimbabwe, Malawi and Kenya, as well as Brazil and the USA.
Duferco is based in Saldanha on the west coast of South Africa, which makes for easy access to sea transport for exports, he said.
“Africa is an important sector for us,” said van Wyk. “There are a lot of opportunities in these countries. But we also have a lot of competition here from China and India.”
The company is, therefore, focusing more on landlocked destinations in Africa, with Zambia and Zimbabwe the most prominent due to their proximity to South Africa.
“In these countries we are a little more protected against the cheap imports because you have to take the products in by truck. But it’s getting harder for us to compete with [imports from China and India],” he said.
Duferco sells cold rolled coil, galvanized products for the construction industry, and annealed steel products. It obtains its hot rolled coil from ArcelorMittal South Africa (Amsa), as its Saldanha plant is only about 3km away from the Duferco premises.
Duferco also buys hot rolled coil from Amsa’s Vanderbilj steelworks.
The company has pickling line facilities, a reduction mill, 12 annealing ovens and a temper mill. It is producing about 8,000-11,000 tpm of annealed and batch products at the moment, Van Wyk said.
Its galvanizing line produces 20,000-23,000 tpm at the moment, he added.
Van Wyk said Duferco South Africa could look at further downstream development once the market has stabilised.
“If we can establish a sustained market for it, we could expand more downstream by building more galvanizing lines or painting lines. As things are, though, we can’t really commit to capital expenses if the market doesn’t allow for this,” he said.