Work­ing to­wards progress

Financial Mail - - FMFOX - Char­lotte Mathews math­

The fi­nal step in a pack­age of trade-offs with ArcelorMit­tal SA (Amsa) will be for the depart­ment of trade & in­dus­try (DTI) to des­ig­nate lo­cally made steel for state in­fra­struc­ture projects.

Amsa’s deal with the com­pe­ti­tion com­mis­sion — to pay R1.5bn to set­tle all out­stand­ing mat­ters un­der in­ves­ti­ga­tion, limit its profit mar­gin on flat steel prod­ucts and in­vest R4.6bn in its op­er­a­tions — fol­lows other con­ces­sions on both sides. The DTI has put im­port tar­iff pro­tec­tion in place for 10 steel prod­ucts.

Amsa CEO Wim de Klerk says gov­ern­ment’s des­ig­na­tion of lo­cal steel for state in­fra­struc­ture projects will only in­crease ton­nages by about 120,000/year, but there is more sig­nif­i­cance in des­ig­nat­ing lo­cal steel for the con­struc­tion in­dus­try.

Paolo Trinchero, CEO of the South­ern African In­sti­tute of Steel Con­struc­tion, rep­re­sent­ing mills and down­stream man­u­fac­tur­ers alike, says if lo­cal steel is des­ig­nated it in­cludes all the down­stream prod­ucts that are made from it. In the­ory this ben­e­fits up­stream mills and down­stream fab­ri­ca­tors.

But des­ig­na­tion is not sim­ple, he says. It is hard to en­sure it is im­ple­mented and sub­stan­tial work goes into an ap­pli­ca­tion to des­ig­nate a prod­uct.

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