State warned of steel firm

The government has been warned to stop protecting one steel industry player, ArcellorMittal SA (Amsa) at the expense of the entire sector, by imposing import dues that favour the loss-making steel giant.

The sector was concerned that the government, through Minister of Trade and Industry Ebrahim Patel’s job-saving plan for Amsa, could be protecting the loss-making firm at the expense of other important players downstream. The firms fear that the proposed duty hikes that Amsa wanted implemented to counter external competition, were killing the business for other manufacturers that provided far more jobs.

Gerhard Papenfus, chief executive of the National Employers Association of South Africa, pleaded with the government to choose between protecting an unprofitable, struggling Amsa which employs 9 000 people and ensuring that its protectionist duties were not strangling the rest of the sector which employed in excess of 500 000 people.

This as Patel frantically considers how to save jobs at Amsa which announced plans to shut down its operation at Saldanha on the west coast which suffered severe losses. An estimated 1 000 workers could be retrenched.

Papenfus suggested that South Africa needed to start preparing for the post-Amsa dispensation because it was up to Amsa to be the master of its own salvation.

“That cost cannot be carried by the steel downstream,” he said.

This sentiment was echoed by Freedom Front Plus spokesperson on trade and industry, Jaco Mulder, MP, who said Patel’s move to save Amsa by offering it lower tariff and other cost-saving methods would not succeed.

The MP said his party would increase pressure on Patel to adjust the import tariffs of cheap steel from Taiwan and Russia in a way that would protect the local industry.