Euro Corp allowed to resume selling ductile steel mesh under new testing regime

Euro Corporation, one of three companies involved in Commerce Commission concerns about testing on their ductile steel mesh products, has reached an interim agreement that would allow it to resume selling the product used in residential construction.

Euro Corp and Brilliance Steel both agreed last month to stop selling their steel mesh products after the commission's initial testing showed they didn't meet the standard requirements in relation to elongation, which are designed to ensure the steel stretches under pressure or movement during an earthquake.

Steel & Tube Holdings [NZX: STU], a much bigger supplier than the other two, was also then embroiled in the dispute after commission tests found its seismic mesh also didn't meet the required standards

Steel mesh is typically used as reinforcement in concrete floor slabs during the construction of houses, garages and other buildings and can also be used in driveways and pathways. After the Canterbury earthquake in 2011, the ductility level was increased to a minimum elongation of 10% from about 2% formerly.

Under the interim agreement with Euro Corp, the commission has agreed to allow it to sell batches of steel mesh, provided they pass specific independent testing and haven't failed testing in the past.

Euro Corp has also signed court-enforceable undertakings that require each current and future batch of the steel mesh to get tested at an IANZ accredited laboratory – and the test results have to be sent to the commission.

The testing requirements under the agreement are in line with an expected change to the current standard that the Ministry of Business is developing after convening a technical advisory meeting with industry and technical experts last week. The new standard will ensure a uniform approach to testing and remove any confusion over appropriate testing methodology.

The commission said its investigation into past non-compliance with the standard is continuing and no batches found to have failed its testing or any other testing will be sold.

Steel & Tube has already agreed to only sell earthquake reinforcing mesh certified by an independent testing laboratory, as well as conducting in-house tests. It admitted last month that it sold "many thousands of sheets" that mistakenly carried the logo of a testing firm.

Steel & Tube argued there was ambiguity in the current standards.

The commission is conducting a wider investigation into the industry, focused on possible misrepresentations on the mesh's performance characteristics, which is a breach of the Fair Trading Act.

It has also sampled steel mesh from Fletcher Building, which didn't raise concerns.

(BusinessDesk)