Big Wins Head List Of Industry Good News

Australia's steel fabrication and construction industry is beginning to turn the tide against imported fabricated steel, with important wins on several landmark projects.

In the face of growing international competition, the industry has succeeded in winning major contracts which had been thought almost certainly lost. Heading the list of major wins is the success of two local companies in securing most of the steelwork involved in Rio Tinto's Comalco alumina refinery at Gladstone in Queensland. Rollpress-Gurr, based in Brisbane, won an order for 7,000 tonnes of fabricated plate for the precipitation tanks area, while Brisbane based Transfield is to supply 15,000 tonnes of structural steelwork.

The news of Comalco's local contracts comes on top of Woodside's recent decision to award contracts to Australian companies, primarily Fremantle Steel and Park Engineers, for 7,000 tonnes of structural steel for the North West Shelf in Western Australia. The Comalco and Woodside decisions set an important precedent for the industry, according to Australian Institute of Steel Construction (AISC) chief executive, Don McDonald.

"These victories are good news not just because of the short term boom they provide, but more in terms of the long term trend they set," he said. "To a large extent the Comalco project was the line in the sand. It has been up in the air for more than three years, and at one stage there was a distinct possibility of the plant being built in Malaysia and the fabrication done in Asia. It was very much a clawing back exercise for the industry. This project's importance to the industry is initially because of its size, but just as important is the precedent it sets for future projects. It maintains and builds on the industry capability and our track record."

The Australian Institue of Steel Construction (AISC) is one of several industry bodies which have sustained a long running campaign to ensure these projects stayed fabricated in Australia. Key contributors to the campaign include the Industrial Supplies Office (ISO), the Australian Steel Institute, the Heavy Engineering Industry Reference Group (HEIRG) and the National Infrastructure Engineering Forum (NIEF). Mr McDonald said the latest successes showed that the campaign was now bearing fruit.

"In the end the crucial considerations were exactly those we have always pushed," he said. "Australian suppliers won these contracts because of their extensive and proven capabilities, and because customers were not inclined to take on the technical, quality and timing risks of using overseasbased suppliers."

Other Successes

On top of these two major wins, several other projects have been secured by Australian contractors since the campaign began. At the head of this list is the Port Waratah Coal Handling project, which involved more than 8,000 tonnes of steel. Other important wins were the Brambles PCI Plant in Port Kembla and the Amcor bottling plant in Gawler, South Australia, each of which used more than 100 tonnes of structural steel. In the west, the Worsley alumina refinery incorporated over 8,500 tonnes, while the West Angeles iron ore project was all designed and built in Australia.

Mr McDonald said all of these projects were bid for and won in a competitive international field. "The Australian industry has stood on its own two feet and won the projects on price, quality and time," he said. "That's certainly encouraging for our industry, because those are the strengths that will keep on winning us the major projects."

Second Grabs

Another important, and growing, area of interest is in the winning back of work previously given to overseas contractors - second grabs. Recent successes in this area include the Millmerran project, which went to China, but Sun Engineering clawed back some A$16 million worth of the work. Similarly, the A$350 million Visy paper mill at Tumut, was awarded offshore despite significant NSW and Federal Government support, but National Engineering has since picked up around A$1.6 million worth of work. In Queensland, the Callide C power station initially awarded all of its structural steelwork to Asia - some A$20 million - but a local Rockhampton fabricator, Lurgi, has since won back more than 2,500 tonnes.

Meanwhile there are several other major projects still awaiting decisions, and securing contracts on them would even further boost the industry. These include the Australian Magnesium Corp, SAMAG (a South Australian magnesium project), the Alcoa Wagerup Expansion and Amcor Botany. However, Mr McDonald believes none of these is in any serious danger of being awarded to overseas competitors. In a further good sign of things to come, he points to several other projects that have emerged in recent times, including a Darwin LNG project and plans by Rio Tinto to build a plant in Kwinana, Western Australia, to utilise its patented direct smelting technology, HIsmelt.

All of these projects present opportunities, but Mr McDonald said it was important for the industry to keep up the effort to win each individual job and not to rest on the laurels of recent successes. "Each job needs to be considered and submissions made on the capabilities of our industry," he said. "It's not an automatic selection of our industry for projects here, and this is part of a trend towards globalisation, global sourcing and global supply chains. Decisions in today's business world are made on a regional or global basis on where to source everything from engineering to materials."

Although the industry campaign against imported fabricated steel is far from over, Don McDonald says it has achieved some important changes. "The main areas of changes have been threefold - in government, in the industry itself and among our customers." he said.

"The government now has a very real interest in our industry - it is listening and acting. Importantly, the industry itself has become more proactive and has shifted from blaming governments to helping itself. And the customers are becoming good corporate citizens, supporting the local industry, although only when the case for localising actually makes business sense, which is perfectly understandable."

Industry campaigners see the immediate future as a time for judiciously balancing optimism with vigilance and continuing struggle. "You can't be complacent, because the job's never finished," Mr McDonald said. "A big part of the job is to make sure our standards remain world class, if not better, so we can continue to present persuasive cases in favour of local supply. Now that the industry has won the work, the challenge is to perform. It is in the interest of each company that has won a major job, and in the interest of the industry as a whole."