Dr. Joseph Seungmin La is constructsteel’s Chair and Vice President at POSCO Europe.
As part of a series of Q&As, constructsteel is interviewing experts within the construction sector on aspects of steel’s performance and sustainability in the built environment.
Steel construction promotion in construction and the need for global approach
Construction has been the foundation of our economy and development as far back in history as we can go. It all started with the building of houses, shops, roads, bridges, harbours and castles to develop and maintain our civilisation. Hence the origin of the term Civil Engineering (in contrast to Military Engineering). The term construction engineering originated as a result of the modern industrial revolution, which took place in the last 150 years. This long history coupled by its intertwined fabric with human lives has made construction very segmented and diverse, not only as a market but also in its requirements. As a result, this makes it harder to approach it with just a ‘single’ overall marketing strategy.
For the steel industry, the construction industry is attractive owing to very significant volumes going there i.e., half of global steel consumption. However, concerning its quality aspect, for example higher steel grades, additional performance distinctions etc., it is viewed as being less attractive vis a vis other industries such as automotive, electrical and others.
The above two characteristics of the construction industry resemble challenging starting points in the promotion of steel in construction. However, a subset of the detailed problems and limitations could actually be a starting point for the steel industry to begin thinking and acting:
Construction has not been the main focus of interest
For the past 25 years the automotive industry has been steel industry’s main focus. Rapid developments and an evolving market has required the steel industry to divert significant resources towards this sector. Indeed, steel grades over 1 GPa in automotive have made their mark together with numerous steel grades for various fabrication needs. As a result, the focus on automotive has generally deterred efforts of the same magnitude in construction. The overall effect of this has been that competing materials have taken market share.
Long term investment and return characteristics
Construction probably has the longest and slowest market and technical development cycle. In contrast to a mobile phone or a car, the former enters the market each year and the latter every 5-7 years. In construction, technologies are typically realised every 10-30 years or longer. This means that slow development characteristics make it very hard for the steel industry, which must invest for a very long-time and equally wait (for long-time) for the return of investment to materialise.
‘Engineering’ language barriers
The steel industry typically converses in the language of materials e.g. strength. However, construction professionals typically converse in the language of structures e.g. stiffness. This small difference is the starting point where we often look and approach the market in a misleading way. It is usually not sufficient to solely develop and introduce new steel grades and request the construction market to adopt it. We need to think and talk in the appropriate ‘engineering’ language in order to better and properly approach the market.
Diverse and segmented market
Various marketing efforts which have approached the construction market with a single and straight- forward strategy have failed. The reason for this is that the construction market is very segmented, with various and different needs and players depending on each segment. It is necessary to break construction down to lower levels and establish a strategic approach to that specific market. For example, constructing a building or a bridge would require a whole different approach towards the value chain, technical requirements, government regulations, supply chains, key players etc.
Ecosystem is absent
Are there many annual large conferences just for steel construction? Do EPCs have dedicated steel construction departments? Are there local companies doing business in the construction industry only with steel? The answer to all of these questions is simply NO. There are many lessons for us to learn if we compare this with concrete and timber. For the market to self-develop/upgrade, an ecosystem needs to be in place which can sustain itself. British Steel in the 1980s undertook this successfully in UK. Besides the UK, there are only a very few other examples to add but in general there have not been many success cases globally. The above examples demonstrate why a global approach is necessary. Below I provide a few examples as to how we can get the process started:
How can we define ‘a global approach’ and what aspects (i.e., research, development, marketing, etc.) are the most prominent? Which are the most challenging?
A global approach in steel construction does not imply that it should be constrained to worldsteel members. Indeed, it could be the starting point, but must progress to potential partners, i.e. product manufacturers and specialists, architects, engineers, constructors etc. Topics could be from all aspects of steel construction and starting from a very high level. Subsequently the details and regional issues can be tackled by the key players in that region for that region’s specific requirements. The topics and methods (research, development, marketing) would be decided based on what the business case is and which approach would be the best for that specific case.
The most challenging issue would take place if the joining party’s focus is on their own interest and does not foresee the importance and the influence that the results of the global higher-level activities could have on their market and business. When everything is done at the regional level with its own parties only, then most likely it will need more time, cost and efforts in reaching a successful result.
What are some landmark examples of alignment across companies or sector associations?
Recent activities of the timber industry could be a good example for us to follow and benchmark. On a very high level, associations or professionals show and promote the extent to which recent innovations can have an effect in the market with one voice. They engage with governments, universities, engineers (concerning sustainability) and enhance their capabilities even further. Their large and diverse ecosystem, involving many small size companies and local professionals, whom collectively engage to develop and promote their business. This large eco-system allows self-evolution which cyclically increases their competitiveness. The number of participants in the timber construction business would probably out score the steel construction industry by 100-fold.
What do you see as short and long-term aspirations when it comes to global approach?
Recent activities launched at constructsteel represents our vision of a global approach. The Zero Energy Building working group is a good example. It is targeted at the residential building market segment in which steel has a small market share and thus minimises conflict of interest with participating members. At the same time, recent awareness and government enforcement into Zero Energy is a good stage for steel to enhance our capabilities. We have started by developing a Best Practice Guide which brings together best practices from all our members. The program now is in a phase where we are working with acknowledged architects on developing an actual design that can be easily adapted to regional project requirements. In our later progress we will work together and assist in developing the business case for our members in their own markets.
Zero Energy Building is just the beginning: There are numerous items and topics that could be approached in a similar fashion. The steel industry needs to initiate these global initiatives to increase our share of the market. Items for a global approach can range from market/project targeted steel developments, assistance in upgrading steel related standards and design codes, educating and promoting young engineers, developing manuals and guides to allow easy access for professionals, manufacturing topics such as prefabrication and modularisation, enhance competitiveness in market segments such as bridges and road barriers and to cope with global sustainability issues. Prioritisation of these items needs to be carried out with limited resources but will be the starting point of future discussions and gatherings by constructsteel members.
What are the necessary steps that stakeholders should take to reach those goals?
Joining the constructsteel program would be a good start. From there, share your knowledge, learn from other’s experience and expertise, discuss amongst members on how to enhance our competitiveness, participate in our new endeavours. Then we should align with our potential partners on mutually agreed goals and targets. constructsteel can be the platform for these kinds of interactions.