Steel & Tube 'maintains confidence' in seismic mesh, says regulator only tested 3 sheets

Steel & Tube Holdings [NZX: STU] has reiterated its confidence in its seismic mesh and says Commerce Commission tests that showed it didn't meet the requirements of the standard only involved a handful of sheets, some made nine months ago.

The building products company said on Wednesday that it would only sell earthquake reinforcing mesh certified by an independent testing laboratory, as well as conducting in-house tests, having admitted last month that it sold "many thousands of sheets" that mistakenly carried the logo of a testing firm. The commission is conducting a wider investigation into the industry.

The commission said it understood the company wouldn't sell the mesh until it could prove compliance though the company said that could disrupt supply in the short term.

"We understand the commission tested only three sheets of mesh, and at least two of those sheets were produced nine months ago," chief executive Dave Taylor said in answer to emailed questions. "There are a number of ways to meet compliance to the standard. As the commission itself has indicated, the commission's tests alone do not mean Steel & Tube's product does not meet the standard."

Asked about his criticism of the standards regime, he said he believed "there is ambiguity in the standards but due to the industry wide investigation, we are unable to comment." The company was cooperating with the commission in the wider investigation.

Steel & Tube was the third building products company to be singled out by the regulator after it last month ordered smaller suppliers Euro Corp and Brilliance Steel to stop selling some steel mesh products used in residential construction while it investigated whether they met building standards. Euro Corp challenged the commission's results.

Steel & Tube's Taylor declined to comment on whether the company had sought legal advice about potential liabilities.

The company "is very much focused on dual testing and we continue to maintain confidence in our product," he said. "Steel & Tube is currently focused on getting product back in the market. We can't comment further at this stage."

Shares in Steel & Tube fell 2.2 percent to $2.25 and have declined 21 percent in the past 12 months.

(BusinessDesk)