Steel & Tube mesh failed tests – Commerce Commission

The Commerce Commission says seismic steel mesh it tested as part of an investigation into Steel & Tube Holdings [NZX: STU] didn't meet the requirements of the standard and it understands the mesh will not be sold until compliance can be demonstrated.

The regulator launched an investigation into Steel & Tube last month after the company admitted selling "many thousands of sheets" of earthquake reinforcing mesh incorrectly labelled as being independently certified.

Steel & Tube used the logo of Christchurch-based independent testing laboratory Holmes Solutions on its steel mesh for four years despite it not having carried out the tests. Steel & Tube's in-house laboratory, which is not independently accredited by national accreditation body IANZ, had been used to test the mesh. Holmes Solutions' lab is accredited by IANZ.

The company says it will only sell mesh shown to be compliant by an external testing agent to reassure customers.

Chief executive Dave Taylor says, "We wanted to provide our customers with the same assurances we have in our testing regime. We had been in discussions with our existing testing provider but due to delays, Steel & Tube had to have discussions and engage other external laboratories to carry out testing and this has taken a little while." Mr Taylor added that this may disrupt supply in the short term.

The Commerce Commission has welcomed Steel & Tube's decision. It says it requested information from the company to substantiate its claims the product does comply with the standard. It says its tests do not establish non-compliance with the Australia/New Zealand standard, only that the product failed its tests.

A sample from Fletcher Building was tested as part of the investigation, with no concerns raised. The Commerce Commission says its investigation into Steel & Tube is continuing.

Steel & Tube appeared to anticipate the Commerce Commission announcement in its statement to the NZX.

Its statement, titled "Steel & Tube removes all doubt of mesh compliance" says the company had been surprised by the variability in results from laboratories, including results provided by the Commerce Commission.

Mr Taylor called for action from both the industry and government. "Given the ambiguity and interpretation encountered by Steel & Tube, perhaps it's time to review the standards regime through the establishment of an industry/government working group." 

Shares in Steel & Tube rose 0.9% yesterday to $2.30. The stock has gained 1.8% this year.

(BusinessDesk)