Third Quarter, 2012

profile
VRN Stainless wins three-year Transnet contract
R29.95

third quarter, 2012

CONTENTS

REGULARS

2 Perspective 20 A certain view 22 Technical News 24 Industry News 27 Sassda News 32 Personality Profile

A message from the executive director, Bill Scurr An industry expert examines SANS 347:2012 for pressure vessels Minteks Deon Slabbert explores how the devil is in the detail News and events from companies in the industry News and events from the association

FOCUS ON
The ferrochrome industry in South Africa is in serious crisis. What does this mean for stainless steel? Sassdas initiative is bearing fruit for companies embarking on the programme We take a closer look at the panel of judges selected for this years prestigious ceremony Where does personal responsibility lie when it comes to witnessing corruption?

We talk candidly to Macsteel VRNs Uys Loubser

Ferrochrome

4 10 13 18

Unido

Stainless Steel Awards

Corruption

PROFILES

16 Macsteel VRN Stainless

ADVERTS
Columbus Stainless General Profiling IDC Macsteel VRN Rimex Metals Stalcor

The stockist has won a lucrative three-year contract to supply 3CR12 for Transnet wagons

Third Quarter, 2012

This magazine is printed on Sappi Triple Green paper

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perspective
CONTACT US
Publisher Maverick Marketing Editor Melissa Rowlston Tel: 011 483 0941 melissa@stainlesssteelmagazine.co.za Photographs Werner Prinsloo Getty Images Contributors Printers Greg Penfold Goldfields Press Tel: 011 627 7740 Fax: 011 627 7741

Letters, comments and subscription requests to melissa@stainlesssteelmagazine.co.za

SASSDA
Tel: 011 883 0119 Fax: 011 883 0183 e-mail: info@sassda.co.za www.sassda.co.za
Stainless Steel is published quarterly and is distributed to stockists, distributors, fabricators, specifiers, consulting engineers, architects, mining, petrochemical and chemical industries, food beverage and pharmaceutical industries, consumer outlets, end-users, educational institutes and provincial and government departments. Maverick Marketing makes every effort to ensure the accuracy of the contents of its publications, but no warranty is made as to such accuracy, and no responsibility will be borne by the publisher or Sassda for the consequences of any actions based on information so published. All opinions, views and expressions contained in this publication are not necessarily those of the management of Sassda. The contents of this publication enjoy positive protection under the Copyright Act and therefore copyright thereof is expressly reserved. Any copying,publication and distribution of part or whole of the publication is prohibited unless consent is granted by Sassda.

t the time of writing, the Reserve Bank had just announced its decision to cut the repo rate by 0.5%. Various commentators have speculated on the reasons for the cut, but all acknowledge that it is largely linked to the economic challenges facing the country both global and domestic. Having talked to quite a few Sassda members over the past weeks, there seems little doubt that the stainless steel industry is having to confront a myriad of issues: pricing pressures; imports; weak demand; and so on. Much is anticipated from the governments infrastructure plans; well founded anticipation, I hope! Challenging times indeed! This quarter has seen Sassda realigning its activities and resources with its new plan of action. In June, the annual general meeting was held and the new Sassda board was elected, see page 26 for more. Bernard Maguire was re-elected as the chairman of Sassda. Various other Sassda events have taken place, including golf days, regional visits and sector meetings. Exhibition stands at building centres in Cape Town and Johannesburg were opened to help bring stainless steel to the home consumer, see Sassda News from page 26. The relationship with Unido for benchmarking also continues. Having seen the benefit some members have derived from this initiative, I would strongly recommend that more members (involved in manufacturing) participate, see page 10 for more on the initiative. Sassda has continued to call for entries for our prestigious Stainless Steel Awards; and in this issue we take a closer look at what our panel of expert judges bring to the table. See page 12 for more, and we hope you have entered your companys successes; closing date for entries was 31 July 2012. We have incorporated more technical information as per readers requests, as well as some handy

information on care and maintenance of stainless steel (page 24). We welcome all suggestions as to what you would like to see in the magazine. On a different tack, corruption (by no means unique to South Africa) is a vexatious issue for the country. An article on corruption and, particularly, the potential ramifications for company owners, directors and managers has been included in the magazine as food for thought (see page 18). The ISSF recently released its Stainless Steel Review for 2012 showing some interesting trends from the past year and some insightful forecasts into the future of stainless steel. Real demand for stainless steel grew significantly in 2010 and 2011 despite the financial crisis, with the recovery anticipated to continue in 2012 and 2013, albeit at a reduced rate. See graph 1. Preliminary figures showed that global stainless steel crude steel production grew by a further 3.3% to 32.1million tons in 2011. There were significant deviations in growth rates between individual countries; some growing as much as 20 percent and some slowing as much as 20%. Factors behind this include production in the global automotive industry, as well as country specific issues such as the earthquake in Japan and flooding in Thailand. The outlook for stainless crude steel production for 2012 is further low growth, being more bullish for 2013. See graph 2. Other interesting details coming from the ISSF reports confirm the growth in Stainless Steel production in China, as well as the gradual decline in traditional 300 series production in the face of growth of the 200 series and the ferritic category it will be interesting to see if the anticipated stability in current Nickel price levels will reverse this trend. See graphs 3 and 4.

Graph 1: Real Stainless Steel Use Growth Central + E (percentage)  Source: ISSF Americas
Central + East Europe Asia w/o Americas China W. Europe/Africa Asia w/o China China

W. Europe C

2001

2002

2003

2002 2004

2005 2003

2006

2007

2005 2008

2009 2006

2010

2001

2004

2007

2011p

2008

2009

2010

Graph 2: Stainless Crude Steel Production  Source: ISSF

Graph 3: Regional Stainless Steel Production: 2005 (left) and 2010 (right)  Source: ISSF Bill Scurr Executive Director Sassda

Graph 4: Stainless Crude Steel Production by Category Source: ISSF

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2011p

40,000 35,000 40,000 30,000 35,000 30,000 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 0 0

1,000 tonnes

1,000 tonnes

ferrochrome

focus on

Chinas ferrochrome smelters are poised to take the top spot in world production

A full-blown meltdown scenario would result in job losses of up to 80 000 people and shrinkage of South African GDP by R23 billion

Ferrochrome industry

under fire
A
commodity curse is afflicting South Africa, but it is not of the classic type reported in the Democratic Republic of Congo, where conflict minerals have opened up a festering regional sore claiming many lives. Instead, the story of South Africas commodity curse is the inability to get the full benefit of the natural resources with which the country is so richly endowed. Rather than greed and guns, it appears that lack of foresight and coordination among key players is to blame. The sad episode of a coal-rich economy being left behind by a global coal boom for want of adequate rail infrastructure is a case in point. Now the focus of blame has shifted from transport to the more intangible sphere of commodity price setting. At stake: the future survival of the South African ferrochrome industry, and the fortunes of all those who have a stake in it, of which stainless steel manufacturers are not the least. The South African chrome value chain, which until recently enjoyed a dominant global market position, employs about 200 000 people and contributes in the region of R42 billion to the national gross domestic product (GDP). However, the industry has acknowledged for some time that its competitive advantage is deteriorating rapidly and could soon enter into a full-blown meltdown scenario, resulting in job losses of 60 000 to 80 000, shrinkage of GDP by R23billion, and surrender of the top spot in world ferrochrome production to China. The latter eventuality reportedly carries environmental implications on a global scale, as capacity displacement from the most energyefficient (South African) to the least energy-efficient (Chinese) smelters in the world would entail an increase in CO2 emissions of about 15% per ton of ferrochrome produced. Each 1000 tons of ferrochome exported creates 17.3 jobs, as opposed to 5.7 jobs per 1000 tons of raw ore. The fact that China has no chrome resources of its own, but purchases half of its raw chrome needs from South Africa, beneath whose soil lies over 80% of all the chrome in the world, can only rub salt into the wound. In an opinion piece on the state of play in the ferrochrome sector written for Business Day, Hernics Ferrochrome CEO Emmy Leeka examines the patient. In his analysis, for a sector weakened over the years by weak prices in an oversupplied market and pummelled by high input costs, among which globally uncompetitive labour and Eskoms annual price hikes, the rampant growth of cheap unbeneficiated chrome ore exports to China threatens to be the final nail in the coffin.

Third Quarter, 2012

ferrochrome
The situation is exacerbated by platinum producers exporting chrome ore extracted from chrome tailings as a by-product of upper-group two (UG2) platinum reef, which is rich in chrome. With its core business under threat in an oversupplied market, cuts in production, project development freezes, exploration drilling deferral and the suspension of operations, the platinum sector increasingly sees chrome exports as a survival strategy - hence the rationale behind plans to scale up exports by some 81% in a years time (Anglo Platinum alone intends to export 2.4 million tons). Unfortunately, while this move may help stave off a short-term collapse in platinum, it can only serve to exacerbate global chrome ore market oversupply. Added to Chinas chromite ore stockpiling estimated at 3 million tons (more than half of which is from South Africa), this could spell a deathblow to ferrochrome. Incoming CEO of JSE-listed ferrochrome company Merafe Resources, Zanele Matlala, concurs. Writing in The Sowetan, she lamented the bitter fruit of the sharp increase in chromite ore exports to China over the last five years. By beneficiating imported chromite ore into ferrochrome, China has at one stroke succeeded in meeting the needs of its ever-expanding stainless steel industry and reduced its dependence on South African ferrochrome - which has seen its share of global exports plunge from 57% to 34% as a direct result. Chinas share of global ferrochrome production, on the other hand, increased 500% in ten years - from 5% in 2001 to 25% in 2011, according to Mike Rossouw, the chairman of the Energy Intensive Users Group, speaking in November 2011. One South African minerals company, Tharisa, even formed a joint venture with Fujian Wuhang (considered to be one of the largest privately-owned stainless steel producers in China) to start building a beneficiation smelter in China at a coastal site in Luoyuan Bay, Fujian Province, China, close by the Baosteel Desheng Stainless Steel Plant. The Tharisa Ferrochrome Smelter is set to become fully operational by 2014, producing 600 ktpa of ferrochrome from ore mined in Rustenburg, South Africa.
6

focus on

By benificiating imported chromite ore into ferrochrome, China has succeeded in meeting its expanding need for stainless steel
In this particular case, power proved to be the critical factor. According to a Tharisa representative, Initially the intention was to build a smelter here in South Africa and in fact, a full feasibility study was completed. However, when we went to talk to Eskom, the indication was that the very earliest they would possibly be able to help us was 2018. How did the mighty South African ferrochrome sector come to be so completely at the mercy of its biggest trading partner? At a policy level, it would seem that South Africa has been completely outplayed or allowed itself to be. In 2006, the Indian government intervened to dampen the effect of raw chromite ore exports to China; the Indian economy now benefits from rising ferrochrome sales and reduced ore exports. While other chrome-rich nations such as Turkey and Oman are considering following Indias example, South Africa has yet to make up its mind on what to do. Incredibly, there is already an instrument with which to regulate the imbalance, namely, a bilateral agreement to the effect that China is obliged to beneficiate South African minerals within South African borders. However, this agreement has simply not been implemented. Fear of retaliation may lie at the basis of this paralysis. After all, should China so desire, it could even force a total shutdown of South African
Third Quarter, 2012

Chinas chromite ore stockpiles are estimated at over 3 million tons, half of which comes from South Africa
ferrochrome by suspending imports of chromite ore and ferrochrome from South Africa. Needless to say, all ferrochome exports from China are banned, even to South Africa. Talks between the government and the ferrochrome sector about government intervention to curb this manifest injustice have been ongoing for five years, without any result. As things stand at the moment, the ferrochrome sector supports former Merafe Resources chief executive Stuart Elliots proposal earlier this year of a levy of US$100 per ton of unbeneficiated chrome ore as a stop-gap measure to buy the time it takes (up to several years) for a more sustainable solution to be created. Naturally, players benefiting from chrome exports are opposed to this measure. One viewpoint is that the proposed $US100 per ton export levy would amount to a ban on South African chrome ore exports, with the predicted result of an internal chrome ore price collapse as has happened in Zimbabwe; the Chinese would simply source their chrome elsewhere. Emmy Leeka dismisses this view with the observation that, in the first instance, South Africas geographic endowment of chrome ore being so vast, there is no other single
Third Quarter, 2012

chrome project that can substitute for the tonnage of South African chrome currently being exported to China; and in the second instance, most other chrome exporters in the world already impose an export tax on unbeneficiated ore, with measures ranging from an outright ban (in the case of Zimbabwe) to the US$90 a ton charged by India. The idea that imposing an export tax might bring about a Zimbabwean-style collapse seems disingenuous, to say the least, given that new ferrochrome smelters are being commissioned in Zimbabwe by Chinese and South Korean firms keen to secure their own sources of ferrochrome. In September last year, mining and trading group Sinosteel Corporation paid an undisclosed sum for Zimasco Consolidated Enterprises Ltd, holding company for Zimbabwes largest producer of 210 000 tons of ferrochrome a year, or 4% of global production. In an announcement, Sinosteel said: The deal will benefit the trade cooperation between the two countries, and help local economic development, create employment opportunities, and promote social stability in Zimbabwe. This month, it was revealed that Chinese firm Afrochine Smelting is constructing two chrome smelters, with

a targeted first phase production of 40 000 tons of ferrochrome in Selous, with an annual requirement of 100000 tons of chrome ore and 24000 tons of coke, commodities readily available in Zimbabwe. Meanwhile, top South Korean steel manufacturer Posco, equally keen to secure a stable source of ferrochrome, has made a deal with Swiss firm Gurtan and Zimbabwean Anchor Holdings to secure a stake in Maranatha Ferrochrome, the third largest ferrochrome smelting company in Zimbabwe. Posco has a requirement of some 43 0000 tons of ferrochrome a year. Maranathas annual capacity is 28000 tons. Is it possible that the Zimbabwean governments export ban has helped attract foreign investment? Are South African ferrochrome companies also being courted by China? Whatever the case may be, it is a fact that steel companies are investing to expand Zimbabwean ferrochrome-smelting capacity at a time when South Africa is operating at only 65% of capacity and expected to reduce further. That said, in South Africa, a possibly more acceptable alternative to a flat export levy would be the commodity exchanges proposed by Pan7

ferrochrome
African Capital CE and adviser to the mining minister, Dr Iraj Abedian. These would necessarily include a chrome exchange market for the formal trading of the commodity. Speaking at a Mining for Change seminar in Johannesburg on 19 June, Dr Abedian claimed multiple benefits for such a measure. Producers would enjoy more stable market conditions, which in turn would underwrite the sustainability of the sector as a whole. Describing the protectionist tariff proposed by the ferrochrome sector as a short-term, knee-jerk reaction to specific developments in the market-place, he said there is no long-term substitute for a chrome exchange market, Predicting the total demise of the ferrochrome sector unless a chrome exchange market is set up, Dr Abedian commented it was not intended as a price-controlling mechanism but that it would smooth the price over cycles. Further suggestions include forming a chrome marketing body; a self-regulating industry mechanism to optimise exports and ensure fair domestic competition. Any chrome exchange would also have to represent the position of domestic chrome traders. No regulatory role need be played by the government. Possible models include Canadas Canpotex potash marketing and logistics organisation, which has sold and delivered potash internationally under the leadership of the potash-producers themselves since 1972, and the chrome and iron ore exchange mechanisms that were successfully implemented in India. Organisations like the South African office of London Commodity Brokers could also act in a similar way to Canpotex and similar entities. Measures to optimise return on domestic resources have also been put in place by Brazil (iron-ore) and China (metallurgical coke). The idea of commodity exchanges for platinum, manganese and chrome fits in well with the South African governments push for beneficiation. In Dr Abedians words, In bankers language, beneficiation means leveraging what you have and making the most of it. The beneficiation gambit holds
8

focus on

Benificiation holds the promise for South Africa to reindustrialise

out the promise for South Africa to reindustrialise on a much larger scale than ever before, thanks to ongoing demand for platinum, manganese, chrome and coal driven by rapid urbanisation worldwide. A long-term 80 to 120 year planning strategy is advised. Research institutes devoted to platinum, manganese and chrome extraction and beneficiation would serve as a good foundation for long-term sustainable mining. Failure to act on beneficiation now will see South Africas window of opportunity closing as China and Russia, among others, pursue their own benefication projects. As Dr Abedian said in an interview with The Daily Maverick: We could end up in a version of the colonial past. Well dig, then battle over taxation, and have energy shortages. In short, it will be the opposite of leveraging upward and a variety of what the economists call the resource curse. That will lead to the dispute of whether to provide energy to mines or hospitals, cities or mining companies. It will, in an extreme case, create colonial-style enclaves in a surrounding sea of poverty. How would a ferrochrome meltdown affect the stainless steel sector? Certainly the loss of locally beneficiated ferrochrome would put pressure on input costs, and since South Africa has long lost the advantage that cheap electricity once conferred, producers would find themselves having to hone their competitive edge in new and innovative ways. One way might be to take a long hard look at prevailing business models and partners, perhaps taking cognisance of the strategies employed by Chinese and South Korean firms mentioned above. A second might be to take a new look at technology. At the Africa Iron Ore conference held in Cape Town recently, the IDCs mining and beneficiation champion Dave Cousins outlined an approach to increasing South Africa steel production capacity. Although there is a surplus of production capacity at present, with South Africa consuming some 5.4million tons of steel a year, demand is forecast to grow by up to three times by 2020, based on sector growth, GDP and emerging market experience forecasts.
Third Quarter, 2012

The loss of South African benificiated ferrochrome would put pressure on stainless steel input costs, forcing producers to hone their competitive edge in innovative new ways
The squeeze on profit margins from rocketing operational costs due to iron ore, coking coal and electricity concerns, as well as logistics and scrap metal, calls for new production methods. The focus should be on sourcing low-cost iron ore, using technologies that avoid coking coal, and optimising location to drive down logistics costs. Technologies that can use South Africas cheap, abundant, low-grade Bushveld Complex-type iron ore will confer maximum advantage. South African steel producers mostly use blast furnaces that require high-grade iron ore and hard coking coal, which now has to be imported and costs more than steel. The IDC itself is leading the way towards a different type of steel production, having identified possible partners for a steel plant intended as competition for ArcelorMittal SA, Evraz Highveld Steel and Vanadium Ltd. However, the government is unhappy with the steel producer because
Third Quarter 2012

it charges import parity prices for locally produced steel. The IDC has studied technology such as titanium blast furnaces and rotary hearth furnaces, although both its chosen solution and its partners remain secret. Further IDC projects focused on cutting downstream steel input prices include a steel mill, possibly for Limpopo, mini-mills to be established in Gauteng and Eastern Cape, and a scrap metal processing unit to be set up in Mpumalanga. Mini-mills make steel from recycled metal, while scrap-substitute mills substitute scrap metal for iron ore. The bulk of South Africas scrap metal currently goes to China and India; an export levy to curb this practice has been mooted. The IDCs focus on more efficient technology is borne out by news that SMS Group is looking to expand operations and explore new markets thanks to the possibilities opened up by new technology and equipment processes. The Germany-based groups

South African subsidiaries, SMS Siemag South Africa and Metix, have a number of initiatives on the go, including projects in Zimbabwe, Zambia and South Africa relating to ferroalloy and copper production smelters, ferrochrome sinter plants, and steel plants. Since SMS Groups 2011 acquisition of a majority share in Metix, the South African company has enjoyed the transfer of know-how of large-scale rectangular furnaces and direct current ferrochrome smelter technology from the SMS Siemag submerged-arc furnaces centre of technology in Germany. Thanks to its association with SMS Siemag, Metix can now offer technology that produces power from smelter-generated gases, reducing constraints on electric power generation in South Africa. SMS Group claims that its energyrecovery and power-saving solutions are well suited to the local market, including iron and steel production.  - by Greg Penfold
9

Unidos benchmarking and supplier development activities can help a company enter and compete successfully by global standards

bears fruit for members

Unido SPX-SA is collaborating with the Department of Science and Technology (DST) to offer companies Technology Assistance Packages (TAP) to provide technology infrastructure access, technical know-how and expertise, skills development and training, technology based services, and design and tooling support. Implementation of the TAP programme falls to The Innovation Agency (TIA) as well as the brandnew Technology Localisation Implementation Unit (TLIU), which the CSIR is hosting on behalf of the Department of Science and Technology. The intention is to enable suppliers to upscale their capacities in order to match buyer requirements. As TLIU unit head Ashley Fabrinoxs Andre Visser Bhugwandin explains in the July issue of the CSIR electronic bulletin: We hope to increase the conduct benchmarking and profiling local content of the technology inputs in of our members on behalf of Unido. imported systems. Through localisation, Various people have been trained to do local technology development and this at Sassda; Michel Basson, Reuben enhanced component manufacturing Pillay and myself. One person does all will bolster industrial growth and job the assessments on all divisions of the creation. Ultimately, this programme company concerned. will support economic development. Profiling is a listing of the The ability of local companies company and the basic contact details to supply State-Owned Enterprises and of the company. Benchmarking is private companies with technology, an extensive process developed materials and equipment will increase by Unido to evaluate the status of independence in terms of services and a company in terms of HR, finance, suppliers and generate sustainable jobs strategic planning, IT and so on. It and skills. compares the specific company to Given the intense level of a multitude of companies operating international competition as the global in a similar manufacturing operation stainless steel sector restructures, it worldwide. This identifies the gap comes as no surprise that Sassda has between the benchmarked company stepped in to help its members take and its international competition. advantage of this opportunity. Fabrinox is the first Sassda As Sassdas market intelligence member to benefit from this intervention, specialist, Lesley Squires, explains: a successful benchmarking leading We are contracted to Unido to directly to Fabrinoxs participation in a
10

Sassda - Unido

Technology Capability Assessment and the TAP programme. Fabrinox is now enjoying assistance in business processes, skills development and access to expertise. Falcon Engineering and Calculus Products have also been benchmarked for participation. According to the Unido SPX website: In the process of Unidos benchmark and the TAP programme Fabrinox showed its competency by emerging as a world-class company. This is an example of how Unidos benchmarking and supplier development activities can help companies to enter and compete in a very tough world market and become global competitors. Stainless Steel Quarterly asked Fabrinoxs Andre Visser why the company had opted to participate in the benchmarking process, to which he replied simply: To benchmark Fabrinox to international standards and to be part of the national list of approved suppliers to get more exposure to contracts. According to him, it was a very positive and efficient experience, although the initial phase was somewhat lengthy. No fresh insights were yielded by the process, but Visser highly appreciated the subsequent access to a vast pool of info and support by the CSIR on implementation. The most interesting aspect of all for him was that the program is prepared to support companies to improve quality and IT systems as well as training via the TAP funding. Further, Visser said, involvement in the programme has enhanced our strategic planning, all the areas which they are prepared to support were part of our strategic planning and we suddenly have support and funding available to implement.
Third Quarter, 2012

Industry leaders in the manufacture of aesthetic and functional steel sheet products, forging a glittering track record including iconic buildings and projects throughout the globe.

(011) 793 3695/8

E-mail projects@rimexsa.co.za

Tel: +27 11 793 3695/8 www.rimexsa.co.za www.rimexmetals.com Third Quarter, 2012 Tel 11 www.rimexsa.co.za / www.rimexmetals.com (0 (011) 793 3695/8 E-mail projects@rimexsa.co.za

BOOK YOUR SEAT AT THE GALA EVENT

OCTOBER 24 2012

Sponsored by:

southern africa stainless steel development association

Sassda

For more information contact Sassda on 011-883-0119 or e-mail awards@sassda.co.za or go to www.sassda.co.za to enter online

The prestigious event is the associations Commitment to recognising and celebrating success in the industry

The Judges Panel

The Southern Africa Stainless Steel Development Association (Sassda) has launched its International Stainless Steel Awards for 2012. Entries are received from all over the industry and range from individuals to companies locally and abroad that are involved in the production, conversion, distribution, use or specification of Stainless Steel. Sassda has nominated five independent judges from various industries to select the best in stainless steel. The panel were individually selected based on their different experience and expertise. The judges are highly knowledgeable individuals with diverse expertise in stainless steel, says Bill Scurr, the executive chairman of Sassda. We thank them all for their time and commitment to helping us celebrate the best in the industry. The judging panel is made up of metallurgist Professor Madeline du Toi, stainless steel stalwart Diego Sella, architect Tom Steer, consumerware designer Diana Carmichael and media representative Bruce Crawford. Madeleine du Toit is Professor and Head of the Department of Materials Science and Metallurgical Engineering at the University of Pretoria. She holds BEng, MEng and PhD degrees in Metallurgical Engineering from the University of Pretoria and a Masters degree in Welding Engineering from the University of the Witwatersrand. She is registered with ECSA as a Professional Engineer and with the International Institute of Welding as an International Welding Engineer (IWE). This is her second time as a judge for the Stainless Steel Awards.
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Diego Sella is a retired registered professional engineer with a BSc in Mechanical Engineering from Wits. He is a member, of the SA Institute of Mechanical Engineers (SAIME) and of the Engineering Council of South Africa (ECSA). Sella is a past chairman of the Heavy Fabricators Association (HFA) and of the Pressure Vessel Manufacturers Association (PVMA). Sella has considerable experience in the pressure vessel engineering and fabrication processes, regulatory requirements, and quality management systems and is well known in the brewing industry as well as the chemical, pulp & paper, and petrochemical industries. The Stainless Steel Awards are very important because they showcase the capability and quality of the local Stainless Steel Conversion Industry, and encourages member companies to aim for better and higher standards, says Sella. Tom Steer is a qualified architect with 16 years experience in the industry. The last 6 years as a transport/ infrastructure architectural specialist. Tom worked exclusively on the Gautrain Rapid Rail Link Project from 2003 to 2011. He was the architectural design team leader for ARUP engineers, managing & designing the GAULIWE bid stations architectural design, ultimately joining the Gautrain Architects JV (Bentel Associates, TPSP Architects) on the Bombela Concession Companys preliminary and detailed design phase in 2005-2009. Stainless steel is always a favorite architectural material. It has immense durability and clean aesthetic lines. I have been privileged to use the material extensively within the infrastructure

environment, and am always amazed at how flexible the use of stainless steel can be, says Steer. What better way to see the best of what South Africa has to offer in stainless by holding an awards programme like the Stainless Steel Awards. I encourage all architects and designers to enter these prestigious awards and develop the appreciation for stainless steel it deserves. Bruce Crawford, is the owner, publisher and editor at BA Crawford Specialised Publications, of which Castings SA and Metalworking News are titles. Crawford has been a board member of Metal Casting Technology Station, Faculty of Engineering, University of Johannesburg since 2008. I believe that a strong economy revolves around an innovative and resilient industrial base. It is important that beneficiation and manufacturing takes the lead. The resultant outcome will reflect in both public and private prosperity. Those taking the lead should be acknowledged for their efforts and the Sassda Awards have for some time recognised this, says Crawford. Diana Carmichael is a well known South African entrepreneur, artist, jewellery designer as well as tableware and flatware designer. Diana owns her own company, which manufactures and distributes functional design-led pewter tableware and accessories and a newly launched jewellery collection. The team will meet in late August to judge the awards, which will then be presented on the night of the awards ceremony, which will take place on 24 October 2012 at Theatre on the Track in Kyalami, Johannesburg.
13

PROFILE

company

VRNs Uys Loubser (left) and new managing director Charles Cammell

14

Third Quarter, 2012

Macsteel VRN is the only mill-aligned distributor capable of meeting Transnets approximately 40 000 tons required for the refurbishment and development of its fleet

VRN Stainless
wins Transnet contract
T
ranswerk Rail Engineering (TRE) has reawarded Macsteel VRN the contract to supply 3CR12 stainless steel to Transnet for the fabrication of their wagons to transport coal, iron ore and other bulk materials. During its 2011/12 financial year, Transnet Freight Rail (TFR) moved 67.7million tons of material, an 8.8% increase on the 62.2million tons achieved in the previous year. VRN were awarded the contract to supply all of the 3CR12 for all new wagons to be build as well as the refurbishishment of the existing fleet, says Charles Cammell, the managing director of Macsteel VRN. The contract will see an estimated 40 000 tons used for the refurbishment. VRN is the only mill-aligned distributor in the country with the ability to provide the full scope of material, says Cammell. However, we are very excited by the nature of the work and hope it will lead to stainless steel being selected as the ideal material for all railway requirements, such as overseas where it is the industry standard for passenger rail as well as coal wagons. TRE will use hot rolled annealed (HRA) stainless steel coil supplied by Columbus, which will then be cut to length on the Fimi Cut to Length Line. Thickness of between 4mm and 10mm will be used. It will be cut, bent, drilled and weld prepped for easy fabrication. The wagons are made from 3CR12 HRA plates (hot rolled and heat treated - not descaled). These plates still have the mill scale intact on the surface. The scale on the surface of the plates in the interior of the wagons is easily removed due to the wet coal abrading the plate surface during the loading and tipping of the wagons. This takes place within several weeks of service leaving a shiny polished surface. The exterior of the wagons retains the HRA hot rolled mill scale finish which is not considered a problem as the life of the HRA plate in this environment has been proven to be very similar to that of a no.1 plate over the longer term. 3CR12 HRA was introduced as a coal wagon material to replace CorTen. The CorTen wagons were suffering from severe corrosion and were only lasting 5 to 6 years before major repairs were necessary. Four of the original 3CR12 HRA wagons which went into service in April 1985 were recently inspected in April 2012 after 27 years of service. It was found that the 3CR12 plates were still in good condition with the highest wear rates recorded of 0.030 mm per year. The interior of the wagons exhibited a smooth polished surface and externally the wagons exhibited a darkish oxide layer (the original hot mill scale finish) with no signs of pitting or other serious forms of corrosion. It is estimated that these wagons will only have to be replaced after another 35 years of service when they are expected to exceed the allowable wear levels. This estimate is based on current service levels. TRE has manufacturing sites in Uitenhage, Bloemfontein, Durban, Pretoria, Germiston and Salt River in Cape Town. Macsteel VRN Stainless will be responsible

Third Quarter, 2012

15

PROFILE

company

Transnets fleet of coal wagaons have been made from 3CR12 stainless steel supplied by Macsteel VRN
for the supply of all 3CR12 requirements for TRE via either its Roodekop Service Centre or any of the VRN operations nationally. TRE does the full assembly from the prepared material. TRE says it is working to catch up export coal volumes lost during the first few months of its current financial year, which included a nine-day shutdown, in an effort to meet its 2012/13 budget of hauling up to 77-million tons to the privately owned Richards Bay Coal Terminal (RBCT), in KwaZulu-Natal. The RBCT received coal at an annualised rate of 66.41-million tons during June, a decline from the annualised tempo of 71-million achieved during April, the first month of the State-owned rail utilitys financial year. TFR had experienced three major derailments and two minor ones since its April shutdown, which had placed it on to the back foot. But commercial manager Burtie Maree said in July that the performance had improved materially since the start of July and that it had achieved weekly tempos of up to 1.65-million tons a rate that would yield more than 85-million tons if annualised. Speaking during a media tour of
16

the rapid rail load-out stations at the Phola coal processing plant, in Ogies, east of Johannesburg, Maree said the focus was on catching up volumes so as to meet the internal target of 77-million tons. Similarly, the management team at Phola a joint venture established by Anglo Inyosi Coal (AIC) and BHP Billiton Energy Coal South Africa (Becsa) in 2009, and operated by Minopex, to process material from AICs emerging Zibulo colliery and Becsas Klipspruit mine was to ramp up to nameplate capacity. Phola engineering manager Kox Gomba said the facility, which processed material from the two Mpumalanga mines on a three-day rotation, had recently breached the 500-hour-a-month operational level, which meant that the facility was closing in on its nameplate of 567 hours a month. At such levels, the facility would be in a position to process nearly 16-million tons of coal yearly for the export and domestic thermal coal markets. Barring operational problems or coal shortages, Maree said TFR had the infrastructure and the rolling stock in place to meet the 2012/13 budget. Plans were also advancing to ramp up

that capacity of the corridor to 81-million tons sustainably by 2014. The last of the 110 Class 19E locomotives being procured from a Mitsui-led consortium should be operational by year-end, while an additional 860 jumbo wagons would be added to the existing fleet of 7 800 by March 31, 2013. In addition, TFR planned to increase its yearly domestic coal volumes by 305% between 2012 and 2019 from nearly 8-million tons to around 30-million tons. The larger Transnet group was also considering plans to facilitate a further expansion of coal exports to 98-million tons by 2019 as part of its R300-billion, seven-year market demand strategy. Initiatives to unlock domestic and export coal resources from the Waterberg region of the Limpopo province were central to this expansion. It was planning a phased introduction, with the first phase likely to facilitate the movement of 23-million tons. The immediate priority, though, was to reduce congestion at the key Ermelo rail junction by diverting general freight via a Swaziland link. - with additional reporting from Engineering News
Third Quarter, 2012

Macsteel VRN: the leading stockist of stainless steel

Macsteel VRN is one of Africas largest stockists, distributors and service centres for high strength steels, stainless steel and aluminium. The division is a member of the Macsteel Group. Macsteel VRN is committed to quality material supply and adding value through its processing and service centre for the benefit of its extensive customer base. Charles Cammell, Macsteel VRN Stainlesss newly appointed managing director, says: The company is South Africas leading supplier of top quality stainless steel and cut to order products for any project big or small. Cammell, who left Columbus Stainless after 26 years to take up the reins from Kit Williamson, says: This is a great opportunity. Macsteel VRN is a well known and reputable brand. The company is hugely successful and the business is sound and well respected. There are a vast number of opportunities and our focus is on doing things right first time and paying attention to detail. Macsteel VRN has 17 branches in South Africa, spanning from Springbok to Cape Town and Johannesburg to Durban. The Roodekop facility in Johannesburg serves as a central warehousing facility for all the branches. This means that we can focus on targeted stockholding elsewhere in the group and Johannesburg functions as the main hub, says Cammell. Our Roodekop Service Centre has world class equipment available; we have just purchased two new machines to ensure that we can fulfil all of our customers requirement at the best price, says Cammell. The Gemini Plasma Cut machine provides great cost savings for customers, as it can drill and cut at the same time. The other new line is the R3.5m Ermak Bending Brake, a 1 000 ton, 6.1m brake, which can cut double the current 3m standard length, creating a one-piece solution that is significantly more cost effective. Cammell says: VRN stays ahead with top range equipment that creates cost-effective solutions for our client base. The company is not just a distributor; it is committed to offering value through engineering, selection of materials, interpreting of drawings, design and drawings. One of our key services is creating kits for easy onsite fabrication, says sales director Uys Loubser. The Piece small or kit-form solution adds value to the engineering, procurement and construction management (EPCMs) as well as small fabricators. This means clients can save on the expense of purchasing highend equipment necessary to prepare the material for installation, says Loubser. Not only do we provide leading edge solutions from coil and cut to size, bending, rolling and weld preparation, but we can do everything necessary in house from start to completion to provide you with the kit to assemble, he says. VRN employs top people to ensure that a clients needs are met. We have engineers, metallurgists, chemists and other professionals on staff. VRN also fulfils all your drawing requirements under the same roof, drawing in CAD or nesting requirements, says Loubser. The company is SABS ISO 9001 certified and committed to safety and quality. The group is a level 4 BEE contributor and VRN Stainless employs 185 people with two shifts per day. We hope to increase that to three shifts per day shortly, says Cammell and reaffirms VRNs commitment to ensuring it can meet any customers requirements. From big to small VRN does it all No job is too big or too small for VRN Stainless. We have clients for whom we cut small intricate design products for companies like Carrol Boyes, as well as large mining projects across Africa, such as the Democratic Republic of the Congos (DRC) copper projects, Tenke Fungurume, Kinsevere and Mumi, says Loubser. Macsteel VRN Stainless cuts the beautiful designs per Carrol Boyes specifications, which are then sent to her company for the final polishing and assembly. VRN also supplied stainless steel for use in South Africas new power stations. MM&G used VRN stainless for the flue cans at Medupi and Murray and Roberts used material from VRN for fabricating the stainless steel coal bunkers, says Loubser. VRN has also recently entered into a partnership with Columbus Stainless to provide made to order stainless steel flat bar to Pabur in Spain for exhaust flanges. The deal is quite unique to the industry, says Cammell, Columbus provides the 10 mm thick 409 plate to VRN.We then cut straighten and pack it. The flat bar is then shipped to Spain for exhaust flanges in the European automotive industry. The deal sees about 10 to 20 tons exported per month.

Third Quarter, 2012

17

If you come across corruption in your organisation, deal with it immediately, otherwise the potential for criminal and personal liability for damages is extensive

personal responsibility for others

The directors and the executive managers of a company may be personally liable for turning a blind eye to corrupt activities within their business. The Companies Act The Companies Act requires directors and executive managers (even managers of divisions) to act in good faith, for a proper purpose and in the best interests of the company. Obviously, if the director or manager instructs or helps someone in the company to pay a bribe in order to procure an order or a tender, they will be personally liable. But what happens if you find out that someone under you is doing business in that way? Is it enough to stop them or dismiss them and then cover it up? Corruption Act If the bribery is continuing or the company is continuing to make money from a contract corruptly procured, something more may be needed. If you allow the activity to continue you will be aiding and abetting the commission of a crime under the Prevention and Combating of Corrupt Activities Act (which for brevity I will call the Corruption Act). The Corruption Act also requires anyone in a position of authority who knows that another person is guilty of corruption, theft or fraud amounting to more than R100000 to report their knowledge or suspicion to the police. Failure to do so is an offence under the act. Duty to report The Companies Act, which imposes obligations on directors and executives to act for a proper purpose and in the best interests of the company, must be used as a guide when deciding what to do about a corrupt employee. If you decide to reprimand or dismiss the employee and take no further
Third Quarter, 2012

Corruption:

company could be severe. You may recall that in the Schaik case the companies involved with the accused in the corruption that were used at one time or another to pay bribes were also convicted under the Corruption Act and fined a total, among 10 companies, over R3 600 000. The shareholders or creditors or the company itself would have a personal claim against a director or manager involved in the corrupt activities or who failed to prevent them. The Companies Act has an overriding provision making any person who contravenes the act liable to any other person who suffers a loss as a result of that contravention. Personal liability There is a common and mistaken belief that where a company suffers a loss that is the end of it. On the contrary, individuals within the company who cause the company to suffer the loss are personally liable for the losses of the company. Where criminal activities are involved it is not difficult to establish the basis for personal liability. There are not many defences available to a director or executive manager who caused or failed to prevent the loss. Disqualification Anyone convicted of an offence involving dishonesty with a fine exceeding R1 000 is disqualified from being a director or executive manager of a company for a period of five years from the date of paying the fine or completing any prison sentence. This includes conviction for an offence under the Corruption Act. Some years ago a director failed to set aside a disqualification because he could not persuade the court that he had rehabilitated himself and was worthy of trust in carrying out his functions. The courts take corruption very seriously and the fines are not likely to
18

Patrick Bracher
action, that decision must be made in the best interests of the company and properly motivated. If you decide not to prosecute and not to recover any losses from the employee because the person involved in the corruption is your best friend or son-in-law, you had better be sure that the decision is indeed in the best interests of the company. Directors and managers are personally liable for these decisions unless they can show they were not fully informed about the facts, and had a rational basis for believing, and did believe, that the decision is in the best interests of the company. If you cannot persuade the court that the decision was made on that basis personal liability may follow. This liability cannot be insured in terms of a directors and officers insurance policy because it relates to criminal activities. Consequence for company The consequences for the

be minimal. The period of five years disqualification can be extended by a court on application of the authorities. The courts have pointed out that corruption undermines the values in our Constitution and pose a serious threat to the democratic state. Corruption is said to be a pervasive and insidious evil requiring rigorous suppression. Excessive gifts It does not have to be bribery in the most blatant sense of the word. In a case in Durban a few years ago the evidence was that business was obtained by making gifts and entertaining customers, employees and suppliers. The gifts included DVDs, alcohol purchases, gift baskets, tickets to sports events and a steady stream of personal gifts intended to build a close relationship with customers. The inducements were used with the approval and probably on the direction of the directors or managers of the company. The court was not impressed and said the practices were appalling and on the face of it constituted a breach of the Corruption Act. The court referred the matter to the director of public prosecutions for investigation of the crime of corruption. Honest environment Remember that the employer and its directors and managers may be personally liable for a failure to deal with problems within the company. Companies have been held to account for breaching their duty to create and maintain a working environment in which its employees are not sexually harassed by other employees. In the same way a company and its leaders can be held to account for creating an environment or failing to prevent the consequences of a working environment in which corruption is allowed to place its stranglehold on transparent and fair ways of doing business. Briber & bribee liable Bear in mind that it does not matter whether the person concerned is the briber or the bribee. Both have been tried and convicted under corruption laws in the past. In the Schaik case, the accused raised as a defence the fact that the party receiving the bribe was not charged with him. This defence received short shrift. The fact that there may be other links in the chain of corruption does not excuse any part of it.
Third Quarter, 2012

corruption

focus on

Third party claims Corruption is a criminal act. The perpetrator of a crime, and an accomplice, is liable for damages caused to a third party for any loss suffered by that party including indirect loss. Thus someone who can prove that but for the bribe they would have been given the order or awarded the tender, for instance, can sue for their direct costs (eg of preparing the tender) and the indirect loss of the profit they would have made on the transaction. This could be a very large sum of money especially in the context of personal liability. Ethic Committee If you are a director or manager of a major company which has a social and ethics committee there is a positive obligation on the committee to institute procedures to prevent corruption and to investigate and deal with corruption wherever it appears. Amongst the

responsibilities of the social and ethics committee are specific responsibilities relating to the prevention of corruption according to national and international standards. All members of the social and ethics committee would potentially have personal liability for failing to take decisions in the best interests of the company or misleading the board of directors in regard to steps that ought to be taken to deal with ethical issues. Summary Therefore the potential for criminal liability or personal liability for damages is extensive. If you come across corruption within your organisation make sure you deal with it properly (if necessary on legal advice) and make sure you do not by inaction become an accomplice before or after the event with serious consequences for you personally. Patrick Bracher is a director of Norton Rose South Africa
19

There are divergent views on the understanding of the new pressure equipment standard. Here is one to help you decipher the rules

SANS 347:2012
standard or hurdle?
SANS 347:2012 Edition 2, the South African National Standard for pressure equipment, has created some waves in the industry. The following article is a perspective of the implications for local fabricators; providing guidelines for negotiating what to many is uncharted territory. At face value, the new standard does no more than bring South Africas pressure equipment legislation in line with the developed world. In terms of SANS 347, a pressure vessel is a housing designed and manufactured to contain a fluid under a design pressure equal or greater than 50 kPa. Unknowns, from the rapid advance of computing to the social media explosion, are responded to in various ways from willing acceptance to great fear. To many, SANS 347 is a real bogeyman. Difficult to grasp and fraught with uncertainty. To be fair, the initial edition of SANS 347 did contain discrepancies which placed the industry at risk because of inability to comply with the law. For many, however, the real sting in the Standards tail is Annex C Conformity assessment procedures for stationary pressure equipment. Since stationary pressure vessels will be the type most often encountered by fabricators of stainless steel, the requirements to play in this league seem to be very high. Equipment categorised as stationary pressure equipment bearing the ASME or RSA/CI/OHSA stamps require special attention. ASME stamped equipment means that it fully complies with all the ASME boiler and pressure vessel code rules, including use of authorized organizations holding a code symbol or certificate of authorization and inspection by an authorized inspector. Where equipment is in full accordance with the ASME code, except for marking and certification
20

requirements, it must be marked RSA/ CI/OHSA. In this case, the manufacturer must be an ASME stamp holder or have a certified quality control system in line with the ASME code (e.g. ASME Vlll Division l Appendix 10). Understanding the new Standard is not that difficult. The clues to comprehending SANS 347 are in its name, Categorisation and conformity assessment criteria for all pressure equipment. The manufacturer of a pressure vessel first has to classify the equipment into one of five hazard categories

from SEP (sound engineering practice) to Category lV. Category l equipment requires the manufacturer to issue a certificate of conformity confirming that the equipment is manufactured to the applicable code of construction, whereas Category ll and above needs to be approved by an appropriately registered professional person. In order to determine the category, the manufacturer has to identify: 1. Type of pressure equipment (pressure vessel, steam generator, piping, pressure accessories, safety accessories, or transportable pressure equipment)
Third Quarter, 2012

liquid)

2. State of fluid contents (gas,

3.Fluid group (1 = dangerous; 2 = not dangerous) Fluid group 1 includes fluids that are explosive, flammable, corrosive, toxic, oxidising and saturated or superheated steam. Fluid group 2 comprises other fluids. The manufacturer then has to plot the design pressure and volume of the equipment against one of ten graphs (Figures 1 through 10 in the SANS 347:2012 Standard document) to

to full quality assurance with design verification and special surveillance of the final assessment (Module H1). From Module A1, AIA intervention is required and from D up, the manufacturer has to operate a certified quality system for production, final inspection and testing. The essential requirement for construction of category ll, lll and lV pressure equipment is design approval by a professionally registered person. Manufacturing procedures cover preparation of component parts,

regulations

focus on

ascertain the hazard category. Most South African fabricators commonly will deal with: Figure 3: Vessels Dangerous liquids and Figure 4; - Vessels Non-dangerous liquids. The next step. Before putting pressure equipment in hazard categories ll, ll, lll or lV on the market, it must be subjected to the procedures in the conformity assessment modules (the second part of the Standards name). There are thirteen assessment modules (A through H1) which dictate the level of conformity from simple internal production control
Third Quarter, 2012

permanent joining, heat treatment and traceability of materials. The pressure vessel manufacturer must have a certified quality control system in line with ASME and SANS 3834-2, and the authorized inspector be an AIA that inspects, verifies and certifies the equipment. It must be noted that the 9001 series QMS Standard is not recognised as a valid quality management system for pressure vessels. As we have seen, this applies to all stationary pressure vessels. Therefore, all South African fabricators wishing to be

considered for this type of manufacturing will have to meet the highest demands of the Standard (equivalent to conformity assessment modules G + H). Before you panic, decide whether or not you want to work at this level. If the will, capability and capital is there, it may be possible to obtain certification direct from ASME. There is, however, help closer at hand. The Southern African Institute of Welding (SAIW) has introduced a welding fabricator certification scheme based on the quality control system requirements of ASME Section Vlll Division 1 Appendix 10. The introduction of this scheme followed the very successful SAIW Welding Fabricator Certification Scheme which provides ISO 3834 certification. This standard covers the quality requirements for fusion welding of metallic materials and is regarded as the welding quality requirement of the 21st century. Certified compliance means global recognition of a companys capabilities. Forty companies in South Africa have been certified to date. Eleven are members of Sassda. They are Elca Engineering, Elgin Engineering, Engski, Gascon, Fabrinox, GEA Aircooled Systems, Hi Tech Pressure Engineering, SHM Engineering, Stainless Fabricators, Steinmuller Africa, Styria Stainless Steel Fabrication and Zimmerman & Jansen. SAIW certification for the management of quality in accordance with ASME Section Vlll Division 1 Appendix 10 is held by nine of the above companies. Fabricators who do not have either of the above certifications may circumvent Annex C3 by choosing an alternate Pressure Vessel Code of Design and Construction from the list in Annex A (Schedule of Health and Safety Standards as approved by the Department of Labour), in conjunction with Module G and full AIA intervention as in the past. Yes, the barriers to top level stainless steel fabrication have increased, but the hurdles not insurmountable. The author of this article prefers to remain anonymous as there are such divergent views on the subject. Should your understanding of SANS 347 differ from the authors interpretation, we would be happy to hear from you the editor.
21

technical

NEWS
By Deon Slabbert
The devil is in the detail Although things in life often appear simple at first glance, they frequently become increasingly complicated once one starts to delve deeper into a problem. Similarly, for materials selection issues, the tendency is to focus on bulk compositions, assuming that elements present in minor or trace quantities can be ignored. Few realise the major impact that specific species in minor concentrations can have either negatively or positively. The destructive nature of the presence of parts per million (ppm) concentration levels of chloride ions is relatively common knowledge and widely publicised. Countless examples exist where a structure or plant should perform satisfactorily for the given set of operating conditions, bar the chloride level that often lead to catastrophic failure. Conversely, for materials like stainless steels that rely on a passive film for corrosion protection, the presence of minor amounts of oxidising agents (i.e. reducible species) such as ferric (Fe3+) and cupric (Cu2+), can actually reduce corrosive attack significantly. This is specifically relevant in reducing acids like sulphuric and hydrochloric acids, where the usefulness of these materials is limited to low concentrations and temperatures. However, the presence of oxidising agents significantly increases this field (i.e. combination of acid concentration and temperature where the material can be used). The effect of the oxidising agents is demonstrated in the iso-corrosion diagram for Type 316 in sulphuric acid in Figure 1. Increasing the content of copper ions in the solution increases the corrosion resistance of the alloy in this environment significantly. Several solutions in the mining industry in South Africa are sulphuric acid based. Figure 1 indicates the relatively limited usefulness of Type 316; with that of Type 304 even more limited. Fortunately the solutions / slurries almost always contain copper and / or iron ions that make it possible for these alloys to be used. This is in contrast with standard graphs for these materials in pure acids which predict high corrosion rates. There are numerous examples where the effect of the oxidising agents ensures that stainless steels can be used successfully in a given application, where the material should have failed otherwise. Hastelloy C2000 is a nickelbased alloy that is specifically designed to be used in both oxidising and reducing environments (i.e. not only in oxidising solutions like stainless steels which can develop protective passive films ). Figure 2 shows the resistance of C2000 in 20% hydrochloric acid (HCl) with varying concentrations of ferric ions present, indicating that the material corrodes at a high rate up to about 300ppm ferric ion, but becomes passive at ferric ion concentrations in excess of 500 ppm. The presence of ferric ions therefore decreases the corrosion rate of C2000 in this instance, similar to the effect of ferric ions on stainless steels. Hastelloy B3 is a nickelmolybdenum alloy that is specifically designed to be used in reducing acids, with excellent resistance to hydrochloric acid at all concentrations and temperatures. B3 performs well in reducing environments, however, contrary to the effect in stainless

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Third Quarter, 2012

steels, the presence of oxidising species (like ferric and cupric) can significantly increase the corrosion rate as shown in Figure 2. The presence of ferric ions in greater quantities than only 25ppm is enough to drastically increase the corrosion rate of B3. The presence of elements at these low levels are seldom reported or taken into consideration often with disastrous consequences, also considering the cost of the alloy. Different alloys behave differently to different environments and therefore, care should be exercised when solution chemistries are reported for materials selection purposes. The presence of impurities in ppm ranges can significantly affect their performance either improving it or promoting catastrophic corrosion. Those interested in the mechanisms of the abovementioned phenomenon can study the polarisation diagram shown in Figure 3, explaining the negative impact of increasing the chloride level, and the positive effect of the presence of oxidising agents (like ferric ion in this instance). If there is enough interest, then the usefulness of these graphs as a tool to predict corrosion properties and its place in material selection can be discussed in a future feature. Please feel free to contact me at deons@mintek.co.za. References and Further Reading: ASM Handbook, Volume 13B, Corrosion: Materials, USA, 2005 NS Meck, P Crook, D Klarstrom, Effect of ferric ions on the corrosion performance of nickel alloys in hydrochloric acid solutions, NACE, Corrosion 2004 Outokumpu Stainless, Corrosion Handbook, Ninth Edition, Finland, 2004 The corrosion resistance of nickel-containing alloys in sulphuric acid and related compounds, CEB-1, Corrosion Engineering Bulletin, INCO, USA, 1983
Third Quarter, 2012

Temperature, oC
120

17-12-2.5
100

300 mg/l
80

200 mg/l

60

40

100 mg/l 0 mg/l

0 mg/l

20 0

20 40 60 80 100

H2SO4 weight - %

Figure 1 Iso-corrosion curve (0.1mm/year) for Type 316 in sulphuric acid with copper sulphate additions
102 4000

10

B-3
400

40

10-1

C-2000

10-2

0.4

10-3 0

200 400 600 800 1000

0.04

Added Fe3+ , ppm

Figure 2 Corrosion rate of C2000 and B3 in de-aerated 20% HCl at varying ferric concentrations

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 1 10 100 1000

potential (volts)

Current Density ( A/cm2) Figure 3 Polarisation diagram showing the effect of oxidising agents and chloride on the corrosion properties
23

Corrosion rate, mils/yr

Corrosion rate, mm/yr

questions
What is the best way to keep my stainless steel in good shape? Dirt and grease accumulate from many sources. They can usually be removed by routine cleaning using soap, ammonia or detergent and warm water. It should be noted that nearly all abrasive cleaners will scratch bright polished stainless steel surfaces. On other finishes the cleaners should only be used in the direction of the polish. A clean, dust and grit free cloth should be used to avoid scratching. In all cases the mildest cleaning procedure that will do the job efficiently should be used. e.g. wash down with warm water and washing up liquid followed by a wash of clean warm water only followed by wiping dry with a clean absorbent cloth. For textured and rigidized finishes a nylon bristled brush will remove any dirt and grime which may accumulate in the valleys of the textured finish. After initial installation, the stainless steel will require thorough cleaning to remove any adhesive either from the protective coating or other building operations - that may have been left on the surface. If marks such as fingerprints etc are a continuous problem a light surface coating of baby oil, clear silicone wax polish or furniture polish such as Neopol will help prevent recurrence of this problem. Care should be taken on choosing such a product to be used on the surface of stainless steel if clothing is likely to come into contact with the surface. Precautions Harsh abrasives should never be used on any polished metal surface. Strong mineral acids such as hydrochloric and sometimes hydrofluoric acid are used to clean masonry, but these should never be permitted to come in contact with stainless steel or any other metal work. If this should happen, the acid solution should be washed off immediately with plenty of water.
Third Quarter, 2012

frequently asked

Pads of ordinary steel wool incorporating soap should be avoided - there is a danger that particles of plain carbon steel from the pads may be left behind after rinsing to give unsightly rust stains. Never use oil based commercial cleaners on the outside of a building. The residual oil film can result in unwanted iridescent colours on stainless steel which can only be removed by abrasive action. Most stainless steel installed at the construction site has a PVC protection film on it. This should remain on the steel until the last possible moment to protect the surface of the stainless steel from such problems as chemical and concrete splatters. Coloured Stainless Steel Under no circumstances should an abrasive, mild or otherwise, be used on coloured stainless steel. If coloured stainless has stubborn marks such as grease marks, use an organic solvent such as Acetone followed by a warm water wash then dry with a clean absorbent cloth. Cleaning Methods Routine cleaning - Soap, ammonia or detergent & soapy water. Sponge with cloth or soft brush then rinse with clean water & dry. This is satisfactory on all surfaces. Fingerprints - Detergent & warm water or organic solvent. This is satisfactory on all surfaces. To minimise recurrence use an aerosol oil cleaner. Oil or greasemarks - Organic solvent, such as acetone, genklene. Stubborn spots, stains & light discolouration - Mild abrasive detergents of the Jif type. Rinse & dry. Heavy scale can be removed by the use of a 10% phospheric acid solution. Rinse with ammonia & water. Dry. Heat tint or heavy discolouration - Try Jif or Chemico (satisfactory on all finishes except mirror & coloured) or alternatively Scotchbrite (use on brushed finish along the grain only). Neglected surfaces discolouration due to accumulated grime - Use an abrasive paste such as T-cut. (Fine for all except Bright Finish and coloured.) This cannot be done in patches but only as a whole. Paint - Use a paint stripper such as Nitromors as directed by the manufacturers then rinse with clean water. Use of soft nylon or bristle brush on textured patterns.  Information provided by Rimex Metals
24

NEWS
Sassda Board
AGM held in June this year The Southern Africa Stainless Steel Development Association held its AGM in June this year. Bill Scurr, the associations newly appointed Executive Director, opened the meeting with a reminder that the associations purpose was to provide a platform for Sassda members to collectively promote the sustainable growth and development of the industry, with the main emphasis on stainless steel converted within the South African economy. Bernard Maguire, the chairman of Sassdas board, summed up the challenges and opportunities facing the stainless steel industry in the past year. The manufacturing sector of the South African economy grew by 2.4% in 2011, according to the African Economic Outlook, said Maguire. And the sector got off to a strong start in the first quarter of 2012 with real value added growing by 12.8% quarter on quarter at an annualized rate. In the stainless steel industry South African apparent consumption grew by 14% from 2010 to 2011; and World Crude Stainless Steel production increased by 3% according to the ISSF, he said. Maguire believes unfair imports of finished goods into South Africa have become a serious threat to local manufacturers during the course of the past couple of years. Maguire summed up the countervailing initiatives implemented by the government and other parties. The government plans to review tariff and non tariff barriers to protect local manufacturing as well as designate certain industries of critical importance to local manufacture by organs of state and public entities. Maguire also believes the government is assisting with initiatives such as the Manufacturing Competitiveness Enhancement Program (MCEP), which aims to support manufacturing enterprises in upgrading their plant and thereby support the value-add process.
26

sassda

Bill Scurr

Bernard Maguire

Mike Campbell

Bertus Griesel

Gary Crawford

Charles Cammell

Ross Cowing

Andre Visser

Peter Viljoen

Sassdas 2012/2014 board & main committee: Bill Scurr, Sassda (Main Board) Bernard Maguire, Cronimet (Main Board - Chairman) n Mike Campbell, NDE (Main Board - Vice Chairman) n Bertus Griesel, Columbus (Main Board) n Gary Crawford, Styria (Import Sector & Main Board) n Charles Cammell, Macsteel VRN (Main Board) n Ross Cowing, Euro Steel (Main Board) n Andre Visser, Fabrinox (Main Board) Jason Naude n Peter Viljoen, Stainless Fabricators (Fabsec & Main Board) n Jason Naude, Rimex (ABC Sector & Main Board) n David Bowrin, Hendler & Hart (Consumerware Sector) n Tom Rice, Bohler (Welding Sector) n Wendy Turton, Elcarbo n Paul McNally, Lasercore n Dave Braithwaite, Steel Studio International n Nash Soni, Hendler & Hart
n n

Third Quarter, 2012

NEWS
Gauteng KZN
Vetri Projects Since its launch in 2006, Vetri Projects has proven itself over & over. Vetri has made a commitment to deliver to the highest quality ensuring total customer satisfaction. They have completed work of varying scope, while still maintaining a top quality product and workmanship. Vetri Projects specialises in the fabrication and installation of stainless steel and mild steel products for the commercial and domestic market. Vetri Projects main focus is in piping, it is also involved in the supply and installation within the commercial sector which incorporates regular maintenance work. Yogan Munsami, Managing Member of Vetri Projects, says the company has expanded its business to cater for the domestic side, which includes the manufacture of driveway gates, pedestrian gates, balustrades, burglar guards, furniture, chandeliers, lamp stands, and custom made products in stainless steel as well as in mild steel galvanised, epoxy/ powder coated. He says that with accredited welding and piping experience, they have set a high standard of workmanship that separates Vetri Projects from many of their competitors. Munsami has vast experience in process piping, compressed air pipework utilities pipe supply for the food and beverage, chemical, dairy, alcohol, textile and other sectors, which has given Vetri projects the foundation to succeed. During the presentation of their Sassda Membership Certificate and the welcoming of Vetri into Sassda by Sassda KZNs Mr Clive Phillpotts, Mr Munsami stated that he was extremely honoured to now be part of Sassda and looked forward to becoming more involved in the regional activities.
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sassda

Sassda launches stainless steel expo stand At the end of July Sassda launched the opening of its stainless steel stand at the Home Ideas Centre in Edenvale. The stand was created to give the public an entry point for all their home stainless steel needs. Rimex donated and installed the kick plates, as well as the cladding on the walls and ceiling. Remkor donated and installed the kitchen unit and the stainless steel cross and balls sign. Franke donated the sink; Steel Studio provided the ballustrades; Fischer donated the poles for shelving, while Hendler and Hart provided the pots and breadboard and Serra Services the soap dish. Grating World donated the grating for the floor. Bill Scurr, the executive director of Sassda, opened the stand saying that following a similar venture in Cape Town, Sassda believed the expo stand in Gauteng was a great way to bring broader awareness of stainless steel to the public, particularly for the architecture, building and construction (ABC), as well as consumerware industries. The thinking behind the stand is that it will help reinforce the stainless steel cross and balls brand in the eyes of the consumer, as well as provide direct spinoffs for contributing members. There are a vast number of feet that go through these expos, and these people will be exposed to the possibilities of stainless steel, said Scurr. The contract with the Home Ideas Centre for the stainless steel stand is valid for 12 months and after this time Sassda will evaluate the value added for members and the stainless steel brand to assess whether to continue. Jason Naude, the head of the ABC Sector for Sassda, said that the stand was the first tangible milestone of the sectors action plan to promote the use of stainless steel in architecture, building and homes. Scurr thanked the sponsors for their kind contributions to the stand and hoped that the exposure would provide good value for them.
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NEWS
Franke
Sassda KZN welcomes members Sassda KZNs Clive Phillpotts is seen congratulating Alan Palmer, the chief executive of of Franke Kitchen Systems, while Clinton Soutter, the national sales manager and Schalk de Beer, the commercial manager, look on in support of Franke Kitchen Systems readmission as a member of Sassda. Franke Kitchen Systems, an accredited 9001:2008 company, is the worlds leading manufacturer of Stainless Steel sinks worldwide with 100 years of experience in its field! Coincidently, Franke Kitchen Systems joins Southern Africa Stainless Steel Development Association in celebrating a century of Stainless Steel. Using precision Swiss engineering, Franke sinks are manufactured with Austenitic Stainless Steel which thus ensures the finest quality and durability. More than 80% of their products are locally manufactured and produced. 2.1 Pic 2244: Franke Kitchens (L-R) Mr Clinton Soutter, Mr Alan Palmer, Mr Schalk de Beer, Mr Clive Phillpotts

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In their commercial sector, Franke have an innovative range enabling their professional customers to set benchmarks of their own. Franke are expert partners, dedicated to create complete hygiene systems that outshine the rest in functionality, design and durability. Their product range includes that of Accessories and Grab Rails, Taps and Water Management, Sanitaryware, Hospital and Mortuary products, Deko Disinfection Units and ZipBoils and Chillers. Franke Kitchen Systems is based in Durban, with sales offices in Midrand, Cape Town and Durban.

Sassda KZN welcomes new member - NIN About 18 years ago, Links Pillay, the managing member of NIN Engineering Services, began a company that has subsequently grown to the extent that it now specialises in the stainless steel and allied fabrication and installation industry. Today, Pillay a hands-on owner boasts a workforce capable of providing services and high quality products to the industry including the petro-chemical, food, beverage, civil & building industries. NIN were quick to advise that their intention was to honour their motto so appropriately named, FOCUS. A shortened description of the letters in the motto which stand for; F = Flexible & Innovative, O = Objectives to be meaningful, understood by all role players with time framed plans, C = Concentration to always be on quality and value adding, U = Understanding the needs, challenges & changing patterns globally and lastly, S = Staff being core partners in the business with quality of the lives of staff being a key responsibility of the organisation. NIN are awaiting receipt of their recently

NIN

accredited ISO 9001:2008 certificate, as proof of their commitment to providing a quality service to all their valued customers which include many major corporate companies throughout KZN Pictured above from left are Michael Govender, Links Pillay, Brandon Pillay and Sassdas Clive Phillpotts, who is presenting the Sassda Membership Certificate to the team.
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NEWS
welding
IIW holds congress The Southern African Institute of Weldings (SAIW) arrangements for the International Institute of Welding (IIW) Regional Congress, with the theme Advancing Science and Technology of Welding in Sub-Saharan Africa, are running smoothly. The congress is to be hosted on the 7th and 8th of November 2012 at Emperors Palace and will include an exhibition of new products and technologies. Professor Andy Kourasaris will present the Jaeger lecture and will be discussion the topic, The welding landscape in South Africa. Professor Kourasaris was awarded the gold medal award in 2010 in recognition of the impact he made with regards to the training of welding engineers as well as his contribution towards the development of the Institute. Born in Cyprus, Prof Kourasaris came to South Africa in 1975 and joined Wits University, carrying out research which lead to his PhD. He became a lecturer at Wits in 1979. At the regional congress, the CEO of the IIW, Cecile Meyer, as well as the President, Baldef Raj, will also deliver presentations. In addition, papers will be presented on welding and Non-Destructive Testing (NDT) related topics such as; Energy, Processing, Transport and Automotive. Delegates interested in attending the congress can e-mail Dimitra Kreouzi at kreouzid@saiw.co.za.

sassda

western cape
Sassda more visible to ABC Sassda has been participating in a permanent exhibition at the Cape Town Building Center for more than a decade. Over the past few years it became apparent that the products and services, as well as other important information, has degraded in quality and has become obsolete to a large extent. When the Center moved from Rondebosch to Northgate in Paardeneiland in 2011, it was seen as an opportunity to give the stand a facelift and to stock it with relevant and value adding information. A new stand was designed, manufactured and installed recently and it acts as a show case for the architectural use of stainless steel as well as relevant information on members, products and services. The stand has been build in a kiosk style with a digital screen showing an offline version of the Sassda website where potential users can find information on products, services and members. It is planned to expand the stand to allow individual members in the ABC sector to advertise their products and services. The Building Center is located in a business park focussed on the ABC sector and is open 7 days a week. This allows the Sassda stand to continuously reach the focussed market of architects, builders, quantity surveyors, students and end-users. Sassda plans to officially open the stand with a function for members and stakeholders during the remainder of 2012.
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Western Cape
Sassda joins forces with WCPG to strengthen the sector The Western Cape Provincial Government launched a strategic process on the 12th of July 2012 with the focus to maximise the potential of the provincial sector for Metals and Engineering. Sassda was invited to attend the session as key industry association together with the Tooling Initiative and Seifsa. The meeting was also attended by representatives of major companies and groupings in the sector. Bill Scurr and Michel Basson represented Sassda at the event that will eventually lead to a strategic document outlining tangible and measurable goals for the sector. Sassda members can look forward to greater accessibility to provincial government projects and funding as the process unfolds. Sassda has been positively involved with provincial government programs over the years and as such, Sassda will continue to play a leading role in promoting its industry at governmental level in order to get it reinstated as priority sector in the province.
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NEWS
NEW MEMBERs
Company Sella Engineering NIN Engineering Services Metforce SA Vetri Projects Abeyla Trading Description Consulting Engineer to the food & beverage industry Process piping, structural steel fabrication and plant maintenance Balustrade fittings, tube, pipe and wire rope Balustrade, fencing, gates, foot rails, hand rails and general fabrication Suppliers/traders of pipes, fittings, flanges and all fabrication to specification. Cut to size, waterjet cutting, laser cutting, milling and machining. Nigel Clinton Soutter Mobeni, KZN Manufacturer of kitchen systems, sinks etc. James Carson or Wim Ridderhof Edwin Stapelberg Nigel Germiston Kempton Park Nagina, KZN Contact Diego Sella Links Pillay Address Glenvista Queensburgh

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Pure Stainless Steel Manufacturers Franke Kitchen Systems

Company

MEMBER terminations

Cupid Steel 19 March 12 Rauserve 23 April 12 Minmetals 24 April 12 Chapman Engineering 23 April 12 Abeyla Exports 23 April 12 PAS Classic Steel 23 April 12 Provin Engineering 2 May 12 Imvusa Stainless 15 May 12 Veritech Manufacturing 31 May 12 Foodspec 4 June 12

Western Cape
Cape board members At the recent Sassda annual general meeting three Western Cape members were elected to represent members in the Sassda structures. Two were elected to the Sassda Board and one will represent members at Main Committee level. Andre Visser, Fabrinox, is not new to the Sassda structures and served on the previous main committee. He was re-elected at the AGM and will now act as Sassda board member. Ross Cowing, Eurosteel Cape Town, is not new to the industry and has played a major role in Sassda activities in the Western Cape for many years. He has been an active supporter of Sassda and the industry in general and will now participate in Sassda at Board level. Wendy Turton, Elcarbo Cape, is well known in the region and has been a keen supporter of Sassda initiatives for many years. She will represent regional members on the Main Committee. This is the strongest representation at Sassda Main committee and Board level for the Western Cape in decades and is a strong indication of the role that the region plays in the organisation with about 20% of the national membership being in the Western Cape. During a recent meeting of these members with Bill Scurr in Cape Town, it was evident that there is strong support and enthusiasm amongst the regional leaders for Sassda activities and a focus to bring more relevant and value to the regional membership.
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NEWS
Air Products
Quality & Safety Awards The success of any company hinges not only on the products and services offered to the market, but more critically, on the capabilities, performance and conduct of its employees. Recognising the contribution that employees make to the quality of its offerings and adhering to Occupational Health Safety (OHS), forms a crucial part of the business philosophies that Air Products practices. Air Products, a leading industrial and specialty gas products and chemicals company, believes that total safety amounts to the integration of safety into all company activities with the objective of attaining industry leadership in safety performance. The annual Air Products Quality and Safety Awards, held in Johannesburg in April 2012, paid tribute to employees who had invested their time and efforts beyond the norm. Quality and safety need to be entrenched as the underlying business principles within the mindset and daily behaviour of all our employees. We take pride in transferring the knowledge necessary for each employee to work together cohesively in applying these principles. The annual Air Products Quality and Safety Awards are a tangible indication of the efforts of the human resources within the Group to achieve incredible quality and safety

industry

levels, says Mike Hellyar, Managing Director of Air Products. While we acknowledge that all our employees are responsible for our success in the marketplace, it would be fair to say that in each category of the Awards, there are some employees who have produced exemplary results, adds Josua le Roux, General Manager Central Support at Air Products. The winner of the Dexter Baker individual award was Gaetano Perillo, Financial Manager at Air Products Head Office. Gaetanos commitment and dedication over many years to the company and its policies as well

as meeting strict deadlines in delivering the financial results are solid examples of how he plays a role in influencing the opinions and attitudes of employees in his division, as well as in the Group as a whole, says Hellyar. The dedication and commitment exhibited by all the award winners benefits not only Air Products, but also the companys customers. By encouraging adherence to stringent quality and safety procedures and policies, all stakeholders are assured of a safer working environment and products that are examples of best practice, Hellyar concludes.

NDE opens Pretoria outlet A new NDE PRETORIA outlet opened at 120 Foundry St in Silverton in June 2012, with comprehensive stocks of stainless steel and aluminium for a wide range of industries. Stock includes stainless steel flat product, sections, tubing, pipe and fittings as well as aluminium flat product & round bar. Cut-to-size round bar (stainless steel and aluminium) is also on offer.

Manager James Barnard and his team offer speedy deliveries as well as fast turnaround and plenty of parking for walk-in and collection customers. Telephonic orders are placed through the sales team on 011 472 1659, with picking slips issued in Pretoria (or Roodepoort if more convenient) and material ready for collection or delivery within 30-60 minutes. Calls can be transferred from the Roodepoort number directly to the Pretoria office.
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NDE

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UYS LOUBSER

profile

ys Loubser is the sales director of Macsteel VRN. Uys has been with the group for the past 11 years. He started off in 2001 as part of the Macsteel Group trainee programme where he was mentored by some of the leaders within the steel industry. From 2002-2004 he was based at Macsteel VRN Rustenburg and was introduced into the coal, earth moving, and platinum mining industry and learned the key facets relating to value added products and supply chain management. In 2004 he was transferred to Johannesburg and based at the Macsteel VRN Group Head Office. In 2006, he joined VRN Stainless and has been there since then. During the 11 years he has also been actively studying and has qualified in various fields such as drafting, SHEQ management, and business management. He is also currently completing his MDP (Management development program) at the Gordon Institute of Business Science. Tell us about your new role at VRN? Not only as sales director, but any job will require basic knowledge which is acquired through formal or informal functional studies. The best way to learn is by teaching others and sharing skills and knowledge. This transformation process determines overall satisfaction which in turn not only contributes to performance objectives, but ultimately the final customer. In my new role I will have to ensure these performance objectives are met and we supply service and quality products according to our internal and external customer requirements. Not only do we focus on working smarter and harder but have fun in doing so! What is the most important thing in your life? My wife Michelle, not only did I find my life partner but a friend to share all that life can throw at us. With that in mind, in September we are expecting our first extension to the family.a little boy! Surely, from what I hear, the importance cannot be underestimated. What is the most important lesson you have learned in sales? Always be honest and truthful! The lesson learnt is if you lie about something you need to remember, if you are honest you do not need to remember anything!! What is your favourite stainless steel object? As a proudly born South African and a braai enthusiast, I would definitely have to say my own designed and manufactured spit braai. How do you define happiness? Having a healthy body and mind is one of the most important things we can have or strive for. As long as we have these going for us ... happiness is just a smile. What do you do in your personal time? I love the outdoors and sport activities. Either playing a round of golf (which depends on the wife) or being in the outdoors with friends around a camp fire.

What is your biggest accomplishment? Throughout my career thus far, goals have been set and various objectives were accomplished. Not one of these comes close to the thought of becoming a father. What else would you like to accomplish in this life time? Being a mentor and supportive father to my children as to which I have had the fortune of having in my life. Tell us something not many people know about Uys Loubser. Each year we all set New Years resolutions that we only keep for approximately one month. I have decided to make mine simpler each year in order to achieve the set goal. This year I decided not to eat broccoli! What are you currently reading? Mobinomics by Alan Knott Craig. The phenomena of a South African mobile company that developed in Stellenbosch. Who do you really admire? People that have the worst living and life conditions and yet they are the ones telling you how to be happy and live life to the fullest! Why stainless steel? As my carbon steel colleagues always say ... the shiny stuff! Its innovative, versatile, and best of all ... its for a lifetime!
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