More than half of steel companies operating in the Middle East and North Africa (MENA) market have reported counterfeit cases, a new study has revealed.
Commissioned by the Steel Alliance Against Counterfeiting (SAAC) – which was set up in 2015 to raise awareness of fake steel – the study involved responses from 70 contractors, consultants and product suppliers in a bid to uncover the extent of the illicit trade across the region.
The research revealed that 53 per cent of the steel industry in the region had at some point in day-to-day operations come across a suspected counterfeit steel product.
Meanwhile, 79 per cent of the industry was in favour of more stringent controls for the import of steel products from certain markets.
The SAAC called for more action to tackle the problem.
"As the survey indicates, counterfeit steel products continue to pose significant risks across sectors and in critical installations like oil rigs, pipelines, oil refineries and so on," said Andrey Burtsey, commercial director for Middle East, Africa and Asia markets at Interpipe.
"Cities in the Gulf Cooperation Council (GCC) region are shining examples of technology adoption and ground-breaking architectural feats. There is absolutely no place for any uncertainty or spurious practices that compromise their infrastructure. Through this study, we are supporting key governmental initiatives and procedures that protect society and sustain economic development."
Lino D'Onofrio, managing director at Raccortubi Group, added: "It is frightening to see that more than half of the respondents have been faced with counterfeit steel products. We call on product suppliers and end-users to join our efforts and to help protect lives and the integrity of structures."
SAAC, made up of 18 steel suppliers, was established to drive awareness of the counterfeit steel industry, which it says is a growing concern where fake steel is being used unwittingly in critical projects and poses a major legal, safety, environmental and financial risk. There is also concern about the risk to reputation of individual companies and the industry in general.
The Alliance fears the presence of bogus steel could become more embedded in the region and threaten investment in infrastructure projects, which is currently booming as the emerging economies grow and money is pumped in. Last year, China pledged $55bn in infrastructure in the region, and in 2014, Saudi Arabia alone initiated a $400bn infrastructure programme.
The growth of construction activity has resulted in a black market that has seen fraudulent branding of non-certified steel, used steel products being advertised and sold as new, and the entrance of intermediaries claiming legitimate European products that are difficult to trace. Much of the counterfeit steel appears to come from Asia.
SAAC is working with the industry to develop measures to detect counterfeit products and forged certificates, as well as carrying out trans-border investigations.
It has already pledged support for ongoing revisions to the UAE Fire and Life Safety Code of Practice 2016, specifically the need for authenticity checks. It has also met with Dubai authorities to discuss collaborative efforts to fight steel counterfeiters and stop fake products entering the market.
Individual companies have also started to take measures to secure their steel. Interpipe, for instance, registered its trademark in Saudi Arabia earlier this year and has also launched an online service that verifies the authenticity of its products onsite via a QR code.
Bertrand de Rotalier, managing director, Middle East, at Vallourec, said the private and public sectors should work even more closely together to apply preventive measures and curb the illicit trade in fake steel. "We cannot emphasis enough the dangers of counterfeit material usage in our sector. We have a number of concrete recommendations that we believe will help to reduce and possibly eradicate the presence of inferior and dangerous steel products."