Evraz in ‘rebirth’ after going bust
Highveld Vanadium’s structural steel mill reopens in Emalahleni
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.