Key benefits of Prefab D-Wall Cages: • Alleviates Site Congestion • Reduces Manpower Dependency • Minimises Wastage

STEELSOLUTIONSMarch 2014

Guest ColumnWe are pleased to launch our inaugural issue of “Steel Solutions”. As its name suggests, the quarterly newsletter aims to provide timely and relevant information regarding the reinforcement steel sector. At NatSteel, we are passionate about serving Singapore’s construction industry and committed to continuously enhancing our products and services. I hope you will find this newsletter useful and we welcome your feedback.

Mr Vivek M.Kamra President and CEO

With the high labour costs and shortage of manpower cited by contractors in the recent Business Expectation Survey (2H13) by the Building and Construction Authority, a product

which can help alleviate this issue is the use of off-site prefab diaphragm wall (D-wall) cages.

The proposed Thompson Line (TSL) runs through some highly developed and densely populated areas which will lead to tight construction sites and associated issues. TSL construction sites will typically lack the space needed for on-site rebar cage fabrication and storage. The use of off-site prefab D-wall cages delivered to site in a just-in-time manner completely eliminates this problem.

The off-site manufacture of prefab D-wall cages is a rebar solution which can offer the contractor sizable savings in terms of time and money. Further reduction in construction time may be obtained from pre-installed couplers which simplify the later connection of beams and slabs.

The recent spate of site construction accidents will also likely push the industry towards an off-site rebar cage fabrication solution. Off-site fabrication of cages is carried out in the factory which is typically more controlled compared to site and therefore safer. Wastages may also be minimised thus aiding sustainability efforts.

A recent project benefitting from off-site prefab D-wall cages is the Stevens MRT station whose site was located on an existing busy road junction in a tight urban setting surrounded by bridges and houses.

Reinforcement Solutions: Prefab D-Wall Cages

On-site installation of a diaphragm wall cage.

The project was beset by a number of challenges which included an extremely limited site space, significant manpower restrictions, site safety and a very tight construction schedule.

By delivering the prefab D-wall cages at the optimal time, the limited site space was not choked and the use of this solution helped relieve the contractor of the manpower challenges they had originally faced.

Diaphragm wall cage.

Business Watch BCA’s Updated Buildability Code Drives Use of More Factory Prefabricated Reinforcements

BCA has revised the Code of Practice on Buildability to raise construction productivity and to reduce the reliance on foreign workers. From 1st Sep 2013, BCA has raised the minimum Buildable Design Scores by 3 points over 2011 scores. This is set to further increase by another 2 points by 1st Sep 2014. Correspondingly, for GLS & IGLS sites, the increase in Buildable Design

Score are set at much higher levels of +8 points and +10 points over 2011 scores.

BCA has also raised the Labour Saving Index score for factory made Prefabricated Reinforcements by about 67% over 2011 scores making Prefabricated Reinforcements more attractive in achieving a higher Buildable Design Score. Prefabricated Reinforcements means Precage & Mesh made from the factory. Points are awarded based on the extent of coverage of use of Prefabricated Reinforcement in each cast in-situ component of a project. The more the coverage, the higher the Buildable Design Score.

From 15 Jul 2013, the Buildable Design Score will be a mandatory quality attribute – with a weightage of 15% of the quality points – which

• Labour Saving Index of Prefab Reinforcements has been raised by about 67%

• Engineers can adopt Prefab Reinforcements (eg. Precage and Mesh) to increase their Buildability Design Score by up to 10 points with improved construction productivity

Government Procuring Agencies will consider during tender evaluation. BCA also publishes the Buildable Design Score Index (BDSI) of C&S Consultants on a monthly basis which will be used in the scoring mechanism. Consultants with higher BDSI will be given higher quality points under the QFM (Quality Fee selection Method).

BCA has mandated to indicate Prefab Reinforcement usage on the building plans, and site checks will be conducted during construction stage to enforce compliance.

Industry Outlook Managing Volatility Remains the Key Challenge in the Steel Industry

The world today has become much “smaller” with almost instant information transfer and 24/7 connectivity across different geographies, given the rapid revolutionary developments in the information technology (IT) space. The steel industry, often with longer development cycles for changes, has also undergone changes. One key aspect is the increased volatility of steel and raw material prices.

Steel prices have seen more volatility in the last decade than the previous decades. Periods

of general stability in prices which provided confidence and business stability for both producers and suppliers are a thing of the past. Long term contracts are generally no longer the norm unless they are hedged or covered by indexed mechanisms. Although steel prices today no longer move by leaps and bounds over a short period of time as seen during the period prior to and during the global financial crisis (GFC), cyclical movements of prices that have sufficient swings that can affect the profitability of steel producers remains a key challenge. Cycles are getting increasingly shorter with opportunities to arbitrage due to quick and easy access to information. Increased speculative behavior with the introduction of financial platforms and products, e.g. Rebar Futures in SHFE, also fueled higher volatility and shorter fluctuation cycles of steel prices.

The steel industry today is recovering from a period of depressed market environments given the Eurozone debt crisis and the slowdown in growth momentum for major developing giants such as India and China. China produces and consumes more than half of the world's steel today. The slowdown in China’s economy, with slowdown in construction and manufacturing sectors,

has resulted in a growing concern on China’s excess production capacity.

Big Chinese steel players started to switch their focus to modernizing their facilities and shift towards producing higher value products. However, this often results in a parallel expansion of capacity for existing commodity grade products, which are feed materials for the higher value products, and worsens the current demand-supply imbalance. With excess supply of commodity grade steel in China, prices are under pressure while producers seek to export more volumes to other markets.

With global steel capacity exceeding steel demand, growth markets are expected to form the pull for the excess supply. Despite the world’s advocation for more open economies and greater trade between countries, the steel market remains a sensitive and often protected market for many developing countries. Market forces will continue to pressure the imbalance and volatility in prices and volumes are set to stay. Market conditions will remain unfavorable to major steel suppliers in the near term, especially those without their own raw materials sources. Managing the volatility risks and weak demand will be critical to the success of the major steel players.

Historical HRC steel prices showing increased price volatility since 2000 as steel prices escalates before major corrections during the GFC.

Rebar prices showing high volatility between 2002 to today. Typical price swings can be of more than 10% within a short period of time (excluding abnormality during GFC period) that can impact the profitability of steel players with margins as low as 1-3%.

• Steel prices have been most volatile with short cycles in the last decade

• The introduction of financial platforms and futures, together with speculative behaviours, contributed to greater volatility

• China’s excess capacity coupled with the slowdown of the domestic construction and manufacturing sectors will drive producers to export

• Steel producers without own source of raw materials will feel the pressure due to gap squeeze and high volatility

NatSteel celebrated 50 years of steelmaking and nation-building with a gala event held at the Marina Bay Sands on 19 August 2013. The event was graced by Mr Cyrus Mistry, Chairman of Tata Sons Limited, Mr Leo Yip, Chairman of the Singapore Economic Development Board, Her Excellency Ms Vijay Thakur Singh, senior executives from various corporates in Singapore, and NatSteel’s key customers.

The event was followed by the Tata Open Forum attended by representatives from 14 Tata companies with footprints in Singapore, where Mr Mistry shared his vision for the Tata group and his personal perspectives. The fruitful session allowed the audience to gain a deeper insight to the business and fostered belongingness within the group.

The festivities concluded with a visit to NatSteel’s flagship plant. Mr Mistry unveiled a plaque in honour of the 50th Anniversary celebrations before embarking on a plant tour which showcased the steel mill’s state-of-the-art facilities for manufacturing of prefabricated reinforcement construction steel solutions.

As a partner in nation building, NatSteel has supplied reinforcement steel for Singapore’s industrialisation and urbanisation since the 1960s, supporting iconic projects such as the Changi International Airport, public housing estates, Mass Rapid Transit network, the Marina

Special Feature Chairman of Tata Sons Graces NatSteel’s 50th Anniversary Celebrations

Bay Sands and Resorts World Sentosa. Today, as part of Tata Steel, NatSteel operates one of the largest single reinforcement steel fabrication centres globally, capable of producing over 600,000 tonnes of prefabricated steel solutions annually.

Mr Mistry and Mr Nerukar flanking the plaque which was unveiled in celebration of NatSteel’s 50th Anniversary.

Mr Mistry (in white) observes the Caging operations in action.

(L-R) Mr Leo Yip, Mr Cyrus Mistry, Mr H M Nerukar and Mr Vivek Kamra cutting the cake in celebration of NatSteel’s 50th Anniversary.

(L-R) Mr Vivek Kamra President & CEO of NatSteel, Her Excellency Ms Vijay Thakur Singh, High Commissioner, Mr Leo Yip Chairman of Singapore Economic Development Board, Mr Cyrus Mistry Chairman of Tata Sons, Mr H M Nerukar Managing Director of Tata Steel unveiling “Marking the Milestones”.

Successful Collaboration PARKROYAL on Pickering - Tiong Seng Contractors

Established in 1959, Tiong Seng Contractors Pte Ltd is one of the leading builders in Singapore’s construction industry and has grown from strength to strength over the years and built its name in building construction, civil engineering and property development.

Tiong Seng Contractors holds the highest A1 grading from the Building and Construction Authority (BCA) in both the civil engineering and general building categories. This grade is a prerequisite for undertaking construction projects of unlimited value in the public sector.

Tiong Seng is a frontrunner in innovation in the construction industry. The company has built up its expertise in precast construction over the years. This highly efficient construction method requires less construction time and manpower. It also ensures consistency in the quality of the precast building materials and timely delivery of projects.

Tiong Seng has completed a portfolio of notable projects such as the Sentosa Integrated Resort, Marina Bay Financial Centre and Capella Hotel. One of their most recent projects is PARKROYAL on Pickering, newly opened in 2012, which has a very complex and wavy facade. Tiong Seng’s precast capability and Cobiax Technology was the key to the successful completion of the project.

NatSteel Holdings has been a close working partner of Tiong Seng Contractors for more than 20 years, playing a part in many award winning developments. As a leading Pan-Asian company that delivers premium reinforcement steel products and solutions for the construction industry, NatSteel is proud to be involved in the construction of the PARKROYAL on Pickering with Tiong Seng, in ensuring efficient and timely delivery of prefabricated steel bars required in the constructing works.

• Tiong Seng Contractors is one of the leading builders in Singapore’s construction industry, with whom NatSteel has been a close working partner for more than 20 years

• Tiong Seng’s precast capability and Cobiax Technology was key to the successful completion of PARKROYAL on Pickering

• NatSteel is proud to work with Tiong Seng on this project, in ensuring efficient and timely delivery of prefabricated steel bars

• NatSteel celebrates 50 years of steelmaking and nation building

• Golden jubilee represents NatSteel’s continued commitment to passionately serve its customers

Cut and Bend (CAB) The CAB operations have been fitted with one-of-its-kind automation concepts and equipment to achieve new levels of productivity.

Mesh The MESH operations have successfully commissioned some of the world’s most modern mesh welding and bending equipment, significantly boosting NatSteel’s production capability.

www.natsteel.com.sg

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50% RECYCLED CONTENT

SGBP 2012-075

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2013 has been a year of transformation for NatSteel’s business in Singapore. With a commitment to passionately serve customers, NatSteel has invested in the future in IT, technology and capability building across its entire operations.

Upstream Operations NatSteel’s upstream operations enables Singapore to effectively use local scrap generated in the most energy efficient and environmentally friendly way through recycling of scrap into construction steel.

NatSteel Recycling NatSteel has invested in a new Henschel shear to enhance its scrap processing capability. Coupled with improvements made to operations, the upgrade greatly improves NatSteel’s scrap processing productivity.

• To better serve customers, NatSteel has invested in modernising and upgrading IT technology and capability building across its entire operations

NatSteel News Modernisation and Plant Upgrade in Singapore

The new Henschel shear boosts the scrapyard’s productivity in scrap processing.

NatSteel has set up a new plant in Johor Bahru, under its subsidiary Easteel Services (Malaysia).

Located in the Senai Industrial Park, the new facility is a full-fledged, highly automated factory producing Welded Mesh, Cut-and-Bend (CAB) and steel couplers.

New Fabrication Plant in Johor Bahru Begins OperationsAs a start, the plant will serve the needs of the precast and high-rise building construction in Johor Bahru as well as the Iskandar zones in Malaysia.

MeltShop The meltshop has been revamped with a new shaft, a FAST tap system, a new hydraulic system, as well as other automation features. NatSteel already operates one of the most energy efficient electric arc furnaces worldwide, and these features will further improve safety and energy consumption.

Rolling Mill The Merchant Bar Mill (MBM) has also been upgraded with a level 2 furnace automation system, a slit-rolling line for small diameter production, quick roll change mechanism, and a new automatic mill control software.

Downstream Operations NatSteel has brought in the most modern and agile systems to augment its capabilities in providing prefabrication solutions.

The new integrated and automated CAB production machine lines.

The second ATT machine was installed, boosting mesh production volume significantly.

Caging NatSteel’s integrated caging centre is designed to enable flexible manufacturing, providing Singapore construction companies the ability to continuously enhance their buildability scores. Recent innovations in using appropriate equipment have helped the company achieve remarkable productivity improvements in building cages.

NatSteel Holdings Pte Ltd22 Tanjong Kling RoadSingapore 628048T: +65 6265 1233F: +65 6265 8317E: sales@natsteel.com.sgW: www.natsteel.com.sgCo. Reg. No. 200810196Z

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