Aveng Trident Steel has its origins in a steel merchandising business founded in 1972 in the Germiston suburb of Wadeville. The company has grown steadily since then, making a number of acquisitions along the way and now covers all of South Africa. In 1998 Trident became part of the Aveng group, which listed on the Johannesburg Stock Exchange the following year. The Aveng group is a leader in infrastructure development with a strong presence in southern Africa, the Middle East and Australia – the combined capabilities of its constituent companies equip it to undertake any project – the Aveng Group is the largest infrastructure development company in South Africa, employs more than 10,000 people, and has the largest market capitalisation of any company within its category on the JSA.
The Aveng group played a key role in a number of the key infrastructure projects to host the 2010 FIFA Soccer World Cup. Aveng Grinaker-LTA (in a joint venture) built the Soccer City Stadium in Johannesburg, the Nelson Mandela Multi-purpose Stadium in Port Elizabeth and the Orlando Stadium in Orlando while other group operations supplied structural steel for the Moses Mabhida Stadium in Durban and the Mbombela Stadium in Nelspruit. Already operating in more than 30 countries, Aveng officially opened its office in Maputo, the capital of Mozambique, in May 2013. The move helped the group consolidate its operations in that country, strengthening its overall offering in Mozambique. Aveng Trident Steel, in partnership with Aveng Steeledale, has also established a new processing plant in the Tete province of Mozambique to serve coal mining and related infrastructure development in the province.
Today Aveng Trident Steel is South Africa's leading steel distributor and processor, and last year it contributed twelve percent of the group's R51 billion consolidated turnover. With its main operation centrally situated in Roodekop, Germiston and additional facilities in Alrode, Durban, Port Elizabeth, Rosslyn and Cape Town, the company supplies a wide product range to the steel industry in South Africa as well as internationally from its extensive steel yards, and its modern and comprehensive processing and service centres. Its focus is on areas such as the steel stock range, whether plate, sections, speciality steels or tube and pipe, and it offers to its customers de-coiling facilities including slitting and guillotining. In short, it offers a one stop service to the entire spectrum of steel consumers.
Aveng Trident Speciality Steels is a division of Aveng Trident Steel. Like the other companies in the group it is ISO listed and highly focused on best practices in operations and safety: in fact the group slogan is “Home without harm, every one, every day.” The company stocks a comprehensive range of carbon, alloy and spring steels. Additional services include automated band-sawing, cropping, ultrasonic, hardness and spectrographic testing as well as heat treatment. Another subsidiary, Aveng Trident Sterling Tube, is based in Alrode. It manufactures and stocks welded tube from 15mm through to 177mm in diameter together with an extensive range of square and rectangular sections and has long been recognised as the supplier of choice to a variety of industries, including furniture manufacturers, automotive equipment, the conveyor industry and scaffold manufacturers as well as supplying air heater and condenser tube.
In a rationalisation operation designed to combine the group's steel business and optimise their collective value, on 1 July 2013 the steel businesses of the group were brought together under the umbrella of Aveng Steel. This now comprises Aveng Trident Steel; Aveng Steeledale, a company primarily engaged in the supply of reinforcing steel to the building and civil engineering industries; and Aveng Steel Fabrication. The new company is led by Managing Director Hercu Aucamp who formerly led Trident Steel. “The combination of the group’s steel businesses under one strong brand will generate immediate benefits in procurement and sales and, by leveraging the synergies between them, will support an ongoing improvement in internal efficiencies,” he said. “In the medium- to longer-term Aveng Steel will provide a stronger distribution network by rationalising its presence in some market areas and expanding in others.”
For the time being though Aveng Trident Steel’s performance continues to be reported separately. In the 2013 financial year it recorded a turnover of just over R6 billion, an increase of five percent over the previous year achieved through higher volumes and an improvement in steel prices. This was against a challenging market environment, with demand for steel depressed and global commodity prices declining. A number of decreases in steel prices between April and November 2012 impacted stock valuations as well as sales margins and had a severely negative impact on profit margins, Aucamp reported. “These factors were compounded by unreliable supply of steel by domestic mills and labour disruptions in the steel and transport sectors which resulted in low stock levels.”
But conditions improved in 2013. Sales volumes and steel prices strengthened, while an increase in steel imports normalised low stock levels towards the end of the financial year. “The private sector continues to provide a solid baseload of work for Aveng Trident Steel in the absence of the long-awaited public infrastructure investment programme and the business is active in the automotive sector which has been strengthened by the South African government’s programme to incentivise increased localisation.” The company's capacity to support the growing South African motor manufacturing industry was boosted in July 2011 when it unveiled a new 630 ton German made blanking press line at its Port Elizabeth premises. It can press curved, trapezoidal or straight-edge blanks cost effectively, and has saved on transport costs and increasing associated local activities such imports of special steels through the Port Elizabeth harbour. “The decision to purchase this particular blanking line was to increase flexibility in this growing economic sector thus promoting a more cost effective component,” said Aucamp. The South African automotive industry ranks third among the South African economic sectors, after mining and financial services.
Aveng, whose value chain spreads itself though all areas of infrastructure, is expected to be a major beneficiary of the South African government's spending over the coming year. Aveng is already involved in the construction of Eskom's two new power stations, Medupi and Kusile, and has secured a portion of two renewable energy projects in a second bidding window. As the group's steel business unit, Aveng Trident Steel is also well-placed to benefit as a provider of specialised steel products to the local construction industry. The business has strengthened its regional network of branches in South Africa and is extending all its offerings into other markets in southern Africa, says Hercu Aucamp.
At the same time it has made strides in its social and environmental performance. In 2013 it achieved B-BBEE Level 3 certification at the same time as progressively implementing the group environmental framework as well as the energy saving project. In June 2013 it completed a successful ISO 14001 recertification audit, he adds.
Looking ahead, the steel industry is likely to remain under pressure in 2014, with no significant improvement in prices or demand for steel. “There will be an ongoing focus on operational improvements to mitigate the challenging dynamics in the steel industry. The labour strike in the automotive industry will have a negative impact on revenue and gross earnings in the first half of the 2014 financial year.”
Written by John O’Hanlon, research by Candice Nice
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