R1bn IDC boost for steel industry, jobs
Push to breathe fire back into foundries of recession-hit sector, region
THE INDUSTRIAL Development Corporation (IDC) has invested more than R1 billion in steel companies in the Eastern Cape in an effort to grow the region’s industrial base. This will not only assist in stimulating growth in the struggling steel industry but is also set to create hundreds of jobs.
The sector has been hard hit by declining commodity prices and the global decline in demand as well as oversupply by major producers in a depressed market.
Through the Downstream Steel Industry Competitiveness Fund, the IDC, in collaboration with the government, hopes to increase competitiveness in the steel industry and incentivise production.
The fund, which is managed by the IDC, will add to the various government interventions for the industry, which include tariff and local procurement measures as well as commitment to job retention, investment and upgrading.
The IDC, in partnership with the Steel and Engineering Industries Federation of Southern Africa (Seifsa), has been in search of the most innovative companies of the year in the metal and engineering sector.
Kingsley Dell-Robertson, the IDC’s regional manager in the Eastern Cape, said innovation was key for the steel industry through these challenging times.
“The value chain, primary steel mills, fabricators and domestic manufacturers at different levels are innovating and finding novel ways of staying sustainable and competitive, while contributing to the economic growth story of the Eastern Cape,” Dell-Robertson said.
The IDC said as the domestic steel industry continued to fight its way out of the global recession, major manufacturing and infrastructure projects, along with the expansion and diversification of the automotive sector, would help ease the steel crisis.
The corporation has invested more than R1bn in five mini-mills, including the Port Elizabeth-based Agni Steels SA.
Agni Steel, which makes steel billets, commissioned the first mini-steel mill in the Eastern Cape in 2014. It was through this project that the IDC fostered the beneficiation of scrap metal, which is normally exported unbeneficiated.
Phase one of the project created 189 permanent jobs. Agni Steel hopes to construct a furnace to create 54 permanent jobs, while 60 temporary jobs will be created during construction.
The steel and engineering industry has a strong base in East London and Port Elizabeth, centred on the automotive industry.
Both the Coega and the East London industrial development zones (IDZs) have opportunities to develop downstream metals and engineering industries while the steel industry, along with machinery and equipment, remains the third-largest contributor to GDP in the province. But more needs to be done.
IDC head of basic mining and metals Mazwi Tunyiswa said building a sustainable and competitive industry was a priority. “As we build sustainable steel businesses with diversified production, benefits will be felt, not only in the economy regionally but also in broader sectors.” –