Karen Harverson
Columbus Stainless is sceptical of carbon steel producer Iscor’s R100-million plan to convert its Pretoria works into a stainless steel facility for the production of slab and black coil.
“While I believe Iscor had little option but to close the operation which wasn’t efficient as a carbon steel facility, or do something different — the semis business is just not viable,” says Columbus chief executive Fred Boshoff.
He believes that by selling slab and black coil rather than beneficiating it further, local producers are giving the value addition advantages to overseas competitors.
“Instead our strategy is to go downstream and through marginal capital investments, convert and process our semis products onshore into finished products such as No 1 coil, cold-rolled coil and sheet, and hot-rolled plate, so we can earn the revenue here,” he says.
Despite this new strategy, Columbus has just signed several long-term contracts to supply slab and black coil to overseas re-rollers.
“We are taking advantage of the option to sell slab until the performance of the new hot mill is fully optimised,” says Boshoff.
He says that even with the expansion, the company’s steel-making capacity still exceeds its cold- rolling capacity.
“Our next project will be to look at installing additional cold-rolling mills and new annealing and pickling lines to further beneficiate product.”
The company has just completed the final commissioning of its R3,5-billion expansion to increase its production of stainless steel product from 150 000 tons a year to 600 000 tons.
The last major facility to be commissioned, the hot rolling mill, went into production two weeks ago, and has already processed some 7 200 tons of stainless steel.
The plant is the biggest single integrated stainless steel facility in the world and produces stainless steel from the ferrochrome stage to the final product.
The brownfields expansion entailed the integration of new facilities into the old plant which continued operating throughout the project.
He says to succeed internationally, the company has to reduce its real costs by 1,5 percent every year.
It has just patented a recently developed nickel- free stainless steel to try and reduce its demand for nickel.
Nickel is used along with carbon scrap, ferrochrome, ferrosilicon and other alloys as the raw material input in the steel-making process.
“We are hoping to move away from the use of nickel as it is a commodity priced on the London Metal Exchange and thus pricing is inflexible and can be very costly,” says Boshoff.
At present, Columbus sources all its nickel requirements within South Africa but at full production, it will require some 45 000 tons of nickel — 50 percent of which will have to be sourced offshore unless more nickel projects get the go-ahead in South Africa.
“We are viewing the development of the Nkomati nickel project with great interest,” adds Boshoff.