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Imports cost jobs in structural steel industry


Thursday 4th August 2011

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The structural steel industry says a big jump in cheap fabricated steel imports is costing jobs.

Steel Construction New Zealand manager Alistair Fussell said many procurement decisions for major projects in both the public and private sectors were based on price, leading to imports of cheap fabricated steel tripling during the past five years.

Analysis by his organisation showed that in 2009, compared to 2008, the value of steelwork imported into this country increased by $43 million of 54 percent, resulting in the loss of more than 150 jobs in the steel construction sector, Mr Fussell said

Government purchasing decisions were meant to be based on a whole-of-life approach, in which the true costs of a procurement decision were considered over the planned life of the product or service.

Lowest-cost purchasing decisions are invariably the most expensive option when whole-of-life criteria were applied, Fussell said.

Unplanned additional costs were likely to arise associated with poor design, sub-standard materials, late deliveries, low-quality fabrication, inability to correct errors, and penalties incurred for project delays.

"What’s more, all too often overseas competitors don’t follow our high standards of safety; many have never heard of sustainability; often subsidies and special procurement conditions apply, which amounts to dumping; and what they pay in wages is well below what we would regard as fair."

It should be mandatory for New Zealand steel firms with appropriate credentials to be considered as potential suppliers for major projects, Fussell said.

More effective public sector procurement practices would see government entities working with local suppliers to build local capability and develop innovative solutions.

"If the Government takes the lead, the private sector will follow. The result will be local firms increasing their capability and capacity, and producing export-quality products."

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