Evraz in ‘rebirth’ af­ter go­ing bust

Highveld Vana­dium’s struc­tural steel mill re­opens in Emalahleni

The Star Early Edition - - NEWS - Di­neo Faku

THE RE­OPEN­ING of Evraz Highveld Vana­dium’s struc­tural mill out­side Emalahleni, Mpumalanga, yes­ter­day is a glim­mer of hope for the coun­try’s strug­gling steel in­dus­try.

Guests at the cer­e­mony heard how Evraz, South Africa’s sec­ond big­gest steel pro­ducer, that went bust in 2015, man­aged to save its 50-year-old mill in­fra­struc­ture.

The re­open­ing of the mill fol­lows a de­ci­sion by busi­ness res­cue prac­ti­tion­ers to con­vert Evraz into a steel in­dus­trial park through which the com­pany gen­er­ates rev­enue from leas­ing its prop­er­ties among oth­ers.

Monies gen­er­ated from the steel park have been used for the re­vamp of the mill.

Busi­ness res­cue prac­ti­tioner Piers Mars­den of Ma­tu­son and As­so­ciates said the busi­ness res­cue prac­ti­tion­ers had the re­spon­si­bil­ity to avoid cut­ting Evraz’ as­sets up into scrap.

“We came up with the con­cept of the steel park be­cause of the sig­nif­i­cant rail in­fra­struc­ture which is now be­ing leased out to busi­nesses. We also have work­shops that we have leased out to gen­er­ate rev­enue,” he said on the side­lines of the launch.

Mars­den said em­ploy­ees had been paid R50 mil­lion out of R300m in re­trench­ment pack­ages owed to them.

“We have not paid cred­i­tors. They are in­ter­ested in what hap­pens to mill in­fra­struc­ture,” he said.

The com­pany also owed R150m to the In­dus­trial De­vel­op­ment Cor­po­ra­tion. In to­tal it owes cred­i­tors R2 bil­lion.

In terms of the mill, Evraz signed a man­u­fac­tur­ing deal last De­cem­ber in which ArcelorMit­tal South Africa (Amsa) sup­pli­ers blooms and slabs to Highveld for pro­cess­ing into heavy struc­tural steel.

Highveld started to de­liver 4 100 tons of prime prod­uct to Amsa in April and had the abil­ity to ramp up to 18 000 tons a month, the com­pany said.

The re­open­ing was a vote of con­fi­dence for partnerships be­tween the gov­ern­ment, labour and in­dus­try, Evraz chief ex­ec­u­tive Jo­han Burger said.

Burger also said that South Africa’s in­fra­struc­ture was built with steel from South Africa with few im­ports.

“How­ever, all that cul­mi­nated in a per­fect storm of low de­mand, low prices which led to a dark day that re­sulted in the stop­ping of op­er­a­tions in 2015. It was even darker in 2016 when we had to let go of our em­ploy­ees,” said Burger.

Burger also said Evraz’s as­sets were go­ing to be sold for scrap in or­der to pay debt be­fore the de­ci­sion to restart the mill was made.

“We can­not build the in­fra­struc­ture of this coun­try with im­ported steel,” he said.

He also said the restart meant that the com­pany had the abil­ity to pro­duce main line rail for the first time in many decades, which would dis­place im­ports and puts South Africa in the unique po­si­tion to sup­ply mar­kets lo­cally and in the re­gion.

Evraz which went into busi­ness res­cue and re­trenched 1 800 em­ploy­ees as the South African steel in­dus­try us barely sur­viv­ing.

The in­flux of cheap im­ports cou­pled and the global sup­ply glut has seen the in­dus­try un­der wa­ter.

Wim De Klerk from Amsa said that the re­open­ing was as a re­sult of lead­er­ship’s de­ci­sion not to leave a void in the steel in­dus­try.

“The restart of the heavy sec­tion mill is a pos­i­tive de­vel­op­ment for the lo­cal steel in­dus­try.

“Not only will it as­sist in curb­ing im­ports of th­ese prod­ucts, but it has the added ben­e­fit of re­viv­ing jobs in the strug­gling steel sec­tor,” De Klerk said.

Evraz, South Africa’s sec­ond-big­gest steel pro­ducer, which went bust in 2015, has man­aged to save its 50-year-old mill in­fra­struc­ture.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.