Long-term protection

Stainless steel prevents concrete reinforcement corrosion, which is a major problem in the Gulf.

Another variety of steel that is gaining prominence in the construction industry is stainless steel primarily due to its ability to protect against concrete reinforcement corrosion, which is a major problem in the Gulf.

"The increasing adoption of stainless steel in the construction industry is a result of intensive research on how building materials could withstand the harsh climate prevalent in the Gulf region. Infrastructure and property developments in the region often need major maintenance and repair after a few years of exposure to the harsh conditions here. The corrosion of reinforcement in concrete structures leads to millions of dirhams being spent on repairs every year. Everything from chemicals, inhibitors and coating of the steel as well as cathodic protection have been tried to control the problem. However, the introduction of stainless steel in the building industry has solved the problem to a great extent," says Chris K, director of ECO, a company that deals in construction materials.

Economical product

"Stainless steel is the only product which, subject to the correct grade chosen, has an expected lifetime of more than 100 years without needing any maintenance at all. Consultants are now increasingly specifying this material. In fact, numerous companies and projects have incorporated this material in their constructions. While initial costs could seem expensive, life cycle cost analyses show that stainless steel is the most economical product, especially as it cuts maintenance, and replacement, or repair costs in the long run. Furthermore the environmental aspects are also in favour of stainless steel as it can be fully recycled at the end of its lifetime," adds Chris K.

He emphasises that developers should prioritise long-term sustainability over short-term profitability to maintain the integrity of their structures as well as repair and maintenance costs that could transfer to investors.

Siddharth Balachandran, Managing Director, Bumga Group, does see developers and the industry opening up to accept new technologies and trends that could affect the sector more positively. "The market is slowly shifting from a change-resistant market to one that is open to accepting the importance of upgrading areas such as technology and human capital. The marketplace, hitherto unresponsive, is starting to react positively to changes in procedures and business processes. The market is beginning to mature in terms of basic business practices as well. Companies are increasingly investing in building up a knowledge base and enhancing intellectual capital."

Steel prices, though, have been a bone of contention for the construction sector. "The high degree of volatility in the price of steel on a global and regional scale has affected the industry. Excess inventory build-up has also proved to be a problem," says Asim Siddiqui, Managing Director, Age Intrade LLC.

"The Middle East is mainly a trading hub, where most of the countries are net importers of bulk commodities including building materials," says Balachandran. "The manufacturing base, on the other hand, is miniscule in comparison. Hence, the local companies are exposed to the risk of volatility in international prices, which in turn, affects the fortunes of the local companies. The recent upturn in prices was a classic case of the demand-supply situation becoming skewed in favour of demand. Massive purchases by China have also played a major part in the increase in prices. The construction industry has been affected, because the majority of the industry players weren't able to predict the timing of the rise in commodity prices and it caught them unawares. It has created a huge vacuum in their financial estimates, because steel constitutes a major part of the numbers," he says.

However, Siddiqui says that rising prices have not affected the demand for steel and he feels that the demand for steel in the Middle East and Gulf will not ebb in the near future. "I believe the demand for steel will keep on increasing in this region for at least a couple of more years. Growth of demand in the region as a whole is increasing at rate exceeding seven per cent per annum due to the massive amount of infrastructure projects being undertaken by the countries in the area.