Gauteng Business News

Send  Share  RSS  Twitter  07 Nov 2011

STEEL: BSi Steel Optimistic for Its African Fture


Recent Gauteng Business News

BSi Steel is setting its sights on expanding its operations in key African markets, following the JSE-listed steel manufacturerÂ’s unprecedented growth and gain in market share in Southern Africa during the past financial year.

As part of its overall growth plan, BSi Steel has invested in a 30 000 m2 central steel processing and distribution centre at Klipriver in Midvaal, which will serve as a gateway for the company to increase its geographical footprint, by establishing retail and distribution outlets across the African continent.

BSi Steel’s African division was first established in Lusaka, Zambia, in 1996 with a modest 80 tonnes of steel per month. Two years of measurable growth saw the company open its second Zambian branch in Kitwe in 1998. BSi Steel expanded its operations into Central Africa, with the establishment of two branches in the Democratic Republic of Congo – in Lubumbashi in 2001, and in Kolwezi in 2007.

As demand from the African market continued to rise, BSi Steel increased its geographical footprint into Zimbabwe in 2008, after opening branches in Harare and Bulawayo. Expansion into Southern Africa has continued steadily, and BSi Steel established two Mozambican branches in Maputo and Tete in 2009, with a another branch being tabled for 2011.

BSi Steel director for Africa Dave Gale points out that the company currently has four branches in South Africa, eight branches in Southern Africa – including Zambia, DRC, Mozambique and Zimbabwe - and a newly-established branch in Accra, Ghana. “BSi Steel boasts an extensive range of products, which are all compliant with internationally-recognised ISO 9001:2000 quality control standards. These include; roofing, processing, flat products, long products, tubing and cold formed sections.”

Bsi Steel Earmarked in Key Markets

He highlights the fact that BSi Steel has earmarked a number of key markets and customer bases across the continent, which will ensure the continued success of the company’s African operations.“Africa is beginning to play an increasingly-important role in BSi Steel’s vision for the future, as a number of governments in the region are beginning to invest substantially in infrastructural development.”

Gale notes that BSi Steel’s short-term focus on its African target market will be in Ghana. “Ghana has been identified as a key market for BSi Steel to build a solid base, as the country has a high GDP, good judicial process and is more business conducive and safer to operate in than other regions in West Africa. Due to the vast potential of this market, we are working hard to ensure that the first delivery of steel arrives at the Accra branch by the end of September, 2011.”

Logistics plays a major role in BSi Steel’s African business, as 90% of the company’s products are transported from South Africa, says Gale. “Local transport strikes have a severe effect on our business across the border, which makes it increasingly-important to create a presence in each local market. Good business relationships are important in structuring deals. Adapting to and understanding local culture is also an important aspect in meeting the demands of different African markets, which tend to be more informal than South Africa.”

Despite BSi Steel’s commitment to service excellence, Gale does admit that the majority of African markets place their highest priority on pricing. “The biggest challenge facing BSi Steel as a competitor in Africa is competing with inferior-quality Asian and other locally-produced materials that are selected based solely on lower costs.”

Bsi Steel Continues to Educate

To overcome this challenge, Gale notes that BSi Steel will continues educating clients in the benefits of quality over price. “Many African based clients are lured in by the initially low cost of cheaper and inferior products. These products; however, prove to be costly in the long-run, as they are not as durable and reliable as the high-quality BSi Steel products. What’s more, many of these inferior products are not backed up with dedicated after-sales and technical support, as is the case with all BSi Steel products,” he continues. “As the African market formalises and economies mature, I believe that quality will become a driving factor in the industry. Until then, BSi Steel will aim to maintain a balance between cost and quality, without compromising its integrity.”

Gale stresses that BSi Steel is committed to contributing towards sustainable socio-economic development and growth within communities. “BSi Steel has enforced a policy whereby 99% of the workforce must be indigenous to the country in which the business is operating. This ensures that communities are provided with new skills and training, which can benefit future generations. As a responsible corporate citizen, BSi Steel also makes regular donations to various reputable African charities, which include orphanages and schools.”

Looking to the future, Gale believes that the potential for BSi Steel in African markets is unlimited. “BSi Steel has a developed a reputation for being a trusted manufacturer and supplier of high-quality products and, as rapid development takes place throughout Africa, the company has placed itself in a strong position to obtain measurable growth in the short term future. Focusing on the longer term, BSi Steel plans to establish branches in other African countries,” he concludes.

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