Are Australian Steel Fabricating Companies Losing All of the Big Jobs to Foreign Suppliers

One question seems to be popping up throughout Australia these days in the conference rooms of the country’s primary suppliers of fabricated steel. It is this …

Are we getting our fair share of the big construction jobs that seem to be taking place in every major city? In truth, it’s a question that needs to be asked.

The harsh reality is that many major Australian construction projects are being supplied by steel fabricators from China and several other Asian nations. Why … their steel, especially aluminum, is dramatically less costly than the products supplied by Australian manufacturers.

And, as might be expected, these overseas purchases are having a major impact on the local companies. Is there a solution? Perhaps … yes.

Recently, the Australian Steel Institute (ASI) has stepped up in support of Australia's steel fabricators.  Speaking at the Golding Industry Conference, John Gardner, Queensland and Northern Territory Manager – Australian Steel Institute, publicly stated that Australian companies are being "muscled out" of major construction projects by cheaper fabricated steel products from overseas suppliers.

His comments immediately brought attention to an important – and growing – problem. And while Mr. Gardner didn't call for import tariffs (protectionism) and didn't blame Australian companies for purchasing the cheaper fabricated steel from China and elsewhere, he did issue a challenge directly to the Australian government.

In brief, he asked the government to "think outside the box" for creative solutions that can help get Australian steel fabricators more involved in major construction projects.

Consider it a clarion call for help … assistance that is much needed … and much deserved. The fact is that Australian companies have the skills that measure up quite well with their foreign competitors. They come up woefully short, however, when it comes to price.

Australian steel fabricators simply can't compete against the much cheaper labor available in China and other Asian nations. The result of that unfair competitive advantage is astounding …

Currently, Australian companies are receiving a very modest 10%-12% of major construction projects nationwide. That, of course, is not very good – for Australian steel fabricators and for the nation's economy.

Fortunately, some ideas are already "on the table."  For example, in Canberra, a new idea called Australian Industry Participation Plans aims to examine just how much local industry is involved in major projects … and what can be done to increase local participation.

There have also been calls for applying Australian standards and specifications to fabricated steel purchases which, if implemented, will definitely help Australian steel fabricators.

In his speech, John Gardner also raised the issue of tax breaks for local steel fabricators as a way to help them become more competitive with foreign suppliers.

Clearly, there is a problem that needs to be addressed and is now receiving lots of attention. Solutions are available. In fact:

It seems obvious that a workable plan, something that helps Australian steel fabricators and remains fair to overseas manufacturers, as well, is "just around the corner."

For more information and news on the events that shape steel fabricating in Australia and elsewhere, visit www.e-fab.com.au regularly. We’re always open.