Firm is hun­gry for scrap metal

CityPress - - Voices -

The re­spon­si­bil­ity for en­sur­ing and con­tribut­ing to­wards the build­ing of a vi­able green econ­omy that will cre­ate the much-needed jobs in the coun­try is taken very se­ri­ously by the Na­tional Em­pow­er­ment Fund (NEF). Ac­cord­ing to the Green Econ­omy Ac­cord signed in 2011 by rep­re­sen­ta­tives from the govern­ment, busi­ness, labour and civil so­ci­ety, it is es­ti­mated that sup­port­ing ini­tia­tives that will lead to the de­vel­op­ment of a sustainable green econ­omy will lead to the cre­ation of 300 000 jobs by 2020.

“Such ini­tia­tives in­clude the full par­tic­i­pa­tion of de­vel­op­ment fi­nanciers, such as the NEF, to sup­port black busi­nesses op­er­at­ing on the ba­sis of the green econ­omy model,” says NEF in­vest­ment prin­ci­pal Eldene Goven­der.

One such busi­ness is the Boipa­tong Scrap Metal Con­sor­tium (BSMC), a 100% black-owned com­pany that sup­plies steel­mak­ers with re­cy­cled fer­rous and non-fer­rous scrap metal and is funded by the NEF for

R5 700 000 to buy stock (scrap metal), equip­ment and work­ing cap­i­tal re­quire­ments. The com­pany re­ceived an ad­di­tional R550 000 from the Van­der­bi­jl­park-based steel man­u­fac­turer ArcelorMit­tal SA with its eight share­hold­ers also con­tribut­ing R114 300 to the work­ing cap­i­tal.

Six of the share­hold­ers own a 63% eq­uity in the com­pany with the re­main­ing share­holder own­ing 37%. BSMC has a three-year con­tract to sup­ply ArcelorMit­tal SA with 108 000 tons of re­cy­cled scrap metal in three years, trans­lat­ing to R324 mil­lion over the pe­riod.

The eight share­hold­ers own their small scrap metal com­pa­nies, which will com­ple­ment the con­sign­ment the BSMC is ex­pected to sup­ply to ArcelorMit­tal SA. In ad­di­tion BSMC will source its stock from other lo­cal com­mer­cial scrap sup­pli­ers, such as Kings­ley Bev­er­ages, Con­sol­i­dated Wire In­dus­tries and Treppo Group. Th­ese com­mer­cial sup­pli­ers are ex­pected to sup­ply BSMC with at least 45 tons of scrap a week. BSMC is al­lowed to source metal from house­hold users, too. The com­mer­cial ad­van­tage that BSMC has is that, al­though there are at least 10 scrap metal com­pa­nies in the Vaal re­gion, only BSMC is BEE com­pli­ant.

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