Amsa makes amends with BEE deal
ARCELORMITTAL South Africa hopes its BEE partnership deal with Likamva Resources will open doors for the company, which is heavily reliant on the government to ensure it and the steel industry survive.
Amsa, which has not had the best relationship with the government and was fined R1.5billion recently by the Competition Commission for past involvement in a steel cartel, is hoping to improve its relationship with the government.
Likamva Resources, which includes stakeholders that have worked with the government and has forged other relationships around Africa, hopes to provide an eye for investment opportunities that Amsa has overlooked.
Likamva chairwoman Noluthando Gosa, who helped draft the National Development Plan, and her business partners have worked with the boards of the Brics New Development Bank, the National Treasury and President Jacob Zuma’s foundation.
Amsa chairman Mpho Makwana said on Wednesday that he hoped the company would expand into Africa and other markets, but continue to develop business in South Africa.
“In this business we grow when there is significant investment in infrastructure. So part of this project is [that] once we complete this chapter, we would have to sit with our BEE partners and hunt for growth together,” Makwana said.
The board now had new eyes and hands of people who understood how the business cycle worked, he said.
“The industry is in crisis,” said Leslie Maasdorp, a BEE shareholder. “We want to enhance and increase the growth potential of the steel industry, especially outside of South Africa, and hopefully we can provide distinct work.”
He said Amsa needed the best relationship possible with the government.
The company has achieved measures to help build a local steel industry, such as tariffs on Chinese imports of cheap steel and government protection on HOPEFUL: Amsa chairman Mpho Makwana has set his sights on expanding in Africa and beyond volumes and pricing. It is waiting for the designation of steel, to compel the construction industry to use local steel.
The construction industry needed “to survive in order for us to survive”, Amsa CEO Wim de Klerk said. Most of the steel it produced was sold in South Africa and then elsewhere in Africa and the Middle East.
The R2.3-billion BEE deal includes a lock-in period of 10 years. Parent ArcelorMittal’s shareholding in the South African unit will fall to 53.72% from 69%. Likamva will buy a 17% stake through a special-purpose vehicle created by Amsa.
Construction industry needs to survive in order for us to survive