Billionaire steel tycoon is spreading his wealth
STEEL tycoon Eric Samson was ready to finish the job. At a tense board meeting of the Nelson Mandela Children’s Fund last year, members grappled with how to complete construction on its flagship hospital in Johannesburg.
The building is backed by Samson, a friend of the late president, and was behind schedule and short of cash.
“We thought we should be on the ground already,” says Sibongile Mkhabela, the fund’s CEO. “As we were looking at the numbers, Samson simply said ‘I will put in R100m’. And that was that.”
The donation comes as Samson, 76, unwinds an industrial empire that he spent more than five decades building across three continents. His fortune, most of which is derived from steel and real estate assets he quietly amassed through his Macsteel holding company, is valued at $1.1bn, according to the Bloomberg Billionaires index. He has never appeared on an international wealth ranking, and didn’t respond to phone and email requests seeking comment.
For Samson, selling shares to the public was never an option. “We’ve ploughed back our profits and funded our own expansion,” he was quoted as saying in a 2006 article in the Financial Mail, one of only two interviews he’s ever granted. “We’ve never needed the glorification. We have simply got on with our business.”
LAST year, he sold 28 South African commercial properties that are home to the businesses and service hubs of Macsteel Service Centres. The real estate, owned by Macsteel Core prop, Macsteel Gen prop and Macsteel Service Centres, was bought for $272m by Johannesburg-based developer Redefine Properties.
Three years earlier, he sold Macsteel Services Centres USA to Duisburg, Germany-based Klockner & Company for $660m, according to media releases at the time.
Samson has spent his whole life in the steel business. He joined his father’s fencing and wiring business, Pan Africa Staal handel, after finishing high school in 1958, according to a 2008 post by Macsteel on a trade group’s website. He became an MD of the business in 1965 after it merged with competitor S Machanick & Company. He founded Machanick Steel & Fencing after buying land in Wadeville, an industrial area of Johannesburg that would become Macsteel’s future headquarters. By 1974, he had bought out his partners and become the company’s sole owner.
After the 1976 riots in Soweto, Samson expanded outside of his home country, according to a 2013 article in the South African Jewish Report, and opened Macsteel’s first trading offices in Houston and London.
In 1996, the steel magnate formed Macsteel International, an Amsterdam-based steel trading company, through a joint venture with Lakshmi Mittal’s Arcelor Mittal SA.
He bought 49% of Iskoor, then a joint venture between Iscor, the state-owned South African steel producer, and Ramla, Israel-based Koor Industries two years later. He gained full control of the combined company shortly thereafter.
In 2006, Samson sold about a quarter of his flagship business, Macsteel Service Centres, to a consortium of black shareholders to keep in line with economic empowerment principles aimed at transferring wealth to the black population.
The buyers included a company controlled by Deputy President Cyril Ramaphosa.
Samson is shopping the rest of his flagship business. The company announced in January that Southern Palace Group, a Sandton, Johannesburg-based business with investments in steel, motoring, technology and property, is the preferred bidder.
He plans to keep Macsteel International and Iskoor, which processes 300,000 tonnes a year and has annual revenue of more than $300m, according to its website. He told the Jewish Report he would never sell Israelbased Iskoor.
SAMSON divides his time between Cape Town and Israel, he told the Jewish Report, and has been investing in property at home.
He bought a R198m penthouse for his daughter in Clifton, Cape Town. He sold three other units in the same apartment block, public records show.
He also owns a vineyard in Franschhoek, as well as several properties elsewhere in SA, according to deeds office records.
The billionaire has maintained his commitment to the Mandela fund, serving on its board for two decades and donating R1m every July to correspond with the former leader’s birthday.
“He often just drove his car around and handed in a cheque,” says Mkhabela. “Sometimes he just left it at the finance department without even letting me know he was here.”
We should be on the ground already … as we were looking at the numbers, Samson simply said ‘I will put in R100m’