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Commerce Commission says Steel & Tube mesh failed its tests

Commerce Commission says Steel & Tube mesh failed its tests

By Edwin Mitson

April 6 (BusinessDesk) - The Commerce Commission says seismic steel mesh which it tested as part of an investigation into Steel & Tube Holdings 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 labeled 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 Solution’s lab is accredited by IANZ.

The company today announced it would only sell mesh shown to be compliant by an external testing agent in order to reassure customers.

Chief executive Dave Taylor said: “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.”

Taylor added that this may disrupt supply in the short-term.

In a statement, the Commerce Commission welcomed Steel & Tube's decision. It says it requested information from the company to substantiate their claims that 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 ongoing.

Steel & Tube appeared to anticipate the Commerce Commission announcement in their statement to the NZX today. Their statement, titled "Steel & Tube removes all doubt of mesh compliance" said that the company had been surprised by the variability in results from laboratories, including results provided by the Commerce Commission.

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% today to $2.30. The stock has gained 1.8% this year.

(BusinessDesk)

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