You are currently viewing our desktop site, do you want to visit our Mobile web app instead?

Numsa strike bites building and construction

Delivery of reinforcing steel, building material disrupted.

PRETORIA – The strike by more than 200 000 Numsa workers in the steel and engineering industry is increasingly impacting building and construction, including several listed companies.

Many companies and contractors are already under pressure and will battle to survive if the strike does not come to an end shortly.

Jeff Thomas, director of the South African Reinforced Concrete Engineers Association (Sarcea) says the factories of many of its members are affected with reports of intimidation. He says delivery from steel mills and steel fabricators has been impacted and that means that Sarcea members cannot pour concrete.

Force majeure has been declared, which means that Sarcea members won’t be penalised for delays, but on the other hand they won’t be compensated for their losses.

It’s difficult to quantify the knock-on effect to the end user, but enforced concrete forms the basic structure of a building and delays at this point can delay the whole project.

“Many of our members are seriously affected. The industry is not in a good space and the effect of depressed prices and low volumes will be exacerbated by the strike”, he says.

Master Builders South Africa (MBSA) also said on Wednesday morning that the strike has caused a mounting shortage of building materials which is threatening to seriously delay the operations of the building industry.

MBSA executive director Tumi Dlamini said, “Work has slowed down substantially on building sites as MBSA members are deprived of essential building components, such as steel plates, framework, pipes, windows and doors, or any other metal component produced by factories affected by the Numsa strike. The plumbing industry has reported a critical shortage of geysers and the piling sector, which relies heavily on steel reinforcement for foundation work, is struggling to obtain supplies.

“Intimidation is taking place outside factories which means MBSA members cannot collect roof sheeting and structural steel. The aluminium sector is struggling to supply building contractors with materials for windows, fenestration and cladding. The increasing woes of the building industry have been well-documented and this new setback could well be the last straw for many struggling contractors,”

Dlamini called on government to intervene.

Ed Jardim, spokesperson of Murray & Roberts, says the group tried to build stock of building materials at its building sites. The longer the strike continues, the more those stockpiles will be depleted and it will be a matter of time before production is affecxted, he says.

On the civil contract at Eskom’s Medupi power station about 85% of the Murray & Roberts workers are present and production continues, while at a slower pace. On the mechanical contracts at Medupi and Kusile work has however been brought to a standstill. Jardim says on the mechanical contracts Murray & Roberts’ costs are covered, but it won’t be able to make margin for the duration of the strike.

Group Five said its steel businesses has been severely impacted by the strike with a high level of absenteeism experienced at its factories and significant and on-going intimidation of its workforce to stay away from work. “Group Five has to an extent mitigated some of the supply risk through over-supplying steel to most of our construction sites in the period leading up to commencement of the strike and continues to manage critical supply during this difficult trading period. Other mitigating strategies are currently being implemented to keep key sites operating.”

Werner de Jager, CEO of Cashbuild, said the delivery of many building materials to the company has been severely affected. “You will be surprised at how many products contain steel: lintels, door and window frames and nails for example.” Other, smaller affiliated unions on strike affect related products like copper components and PVC pipes. This has a big impact on plumbing materials, he says.

He adds that Cashbuild has had ample warning and has built its stocks, but it won’t be able to continue supplying customers without replenishing stock for more than five weeks. There will be a lag even after the strike comes to an end before manufacturers can resume supply, he says.

De Jager said he just received notice that MacSteel has declared force majeure, as have various other suppliers.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


Comments on this article are closed.





Follow us:

Search Articles:Advanced Search
Click a Company: