In January, the New Zealand Shareholders Association visited two Steel & Tube sites in East Tamaki. Here's what they had to say.
Note: NZSA is not a registered financial adviser and can not and does not give advice. Any comments are those of the writer and do not state NZSA policy
"Our visit to Steel & Tube (STU) was interesting on several different levels. First of all, STU’s huge plant is located on the Highbrook estate, and once it was realised that we would be visiting Goodman Property in the morning, we were invited to visit the STU plant in the afternoon. I wondered how many of our 60 attendees to Goodman would be interested in carrying on to STU, but 43 people put their names down to attend, so there was a lot of interest.
There were some other factors. We were offered lunch when we arrived, and nothing beats a free lunch. There was a chance to do an interesting factory tour of the production facilities of one of NZ’s key industries. There was the fact that I’d been reading about how substandard imported Chinese steel had come into the country and been used in major construction and infrastructure projects. Why are we so laid back and casual, and our systems so inadequate, that we’ve allowed that?
And there was another matter of interest. Susan Paterson is the chair of STU and also a director of Goodman. Interesting, and rather wonderful, that a manufacturing industry such as STU has got a woman chair, even in 2020. (I went to a Turner’s ASM a couple of years ago and they didn’t even have a woman on the board). And, on a personal level, I found out Ms Paterson is the daughter of a woman in our church who is still, at a very senior age, a hardworking contributor to our local community. The lunch turned out to be a boxed lunch from the charity Eat My Lunch, which gives a free lunch to a school child in need for every lunch sold. I can’t say I loved it, but there we were sitting in STU offices devouring an Eat My Lunch out of a box, with a well-known director promoting the charity; like mother, like daughter! And isn’t this what NZ is all about?
The overriding impression of our visit is how enthusiastically we were greeted. STU’s management team including CEO Mark Malpass, CFO Greg Smith, Darryn Ross general manager of Roll Forming, Dan Blackbourn and of course chair Susan Paterson were available to host and talk to us.
We were divided into two groups and were given a comprehensive tour of the Coil and Purlins facility followed by their Roofing site. Processing was halted especially for our visit, and I would like to pass on NZSA’s thanks to STU for this. Production facilities were of huge interest to our members, who asked a lot of questions as we toured around. STU is a large supplier, processor, and distributor of steel products in NZ. Those products include long-run roofing materials, pipes, valves and fittings, mesh and reinforcing, and the company has a national network of branches and distribution centres. The site tours were fascinating and, although we had a big turnout of members on the day, I would recommend a repeat visit in the future for those who missed out.
In their speeches to us, Mr Malpass and Ms Paterson noted a couple of ongoing risks and challenges for the business. There has been an ongoing problem with aggressive pricing by key competitors driving prices down, which makes it hard to compete. And with contract risks, everyone tries to move the risk on to somebody else; Transmission Gully has been an example of this. But, they said, on a more optimistic note “the long pipeline of infrastructure [spend] bodes well”.
Are companies like STU of strategic importance to NZ? I can’t help thinking they are. Companies such as STU also contribute to community involvement. On STU’s website, there is a long list of community initiatives and charities to which it contributes. Eat My Lunch is not the only recipient of their generosity. And I’ll go out on a limb and say this stuff is important. I’ve been reading in the business papers all holidays about how the corporate world is subtly adjusting its focus towards environmental responsibility and community involvement. I have no idea how well STU will fare, but management’s enthusiasm for the business is palpable and is demonstrably well ahead in its commitment to social responsibility."
Written by Fiona Gray
Learn more about the Steel & Tube board and management team here