Zuma weighs in on steel crisis
THE CRISIS in the steel industry is receiving attention at the highest level as President Jacob Zuma appeals to stakeholders to work tirelessly to save the thousands of jobs that could be lost.
Up to 40 000 workers could be retrenched by the end of the year in spite of several emergency measures put in place after a meeting between the government, business and labour last week.
Yesterday, the Presidency blamed the recession on global factors. The industry had cited steel imports, mostly from China, as a major contributor.
“The president is concerned about the pressure that the industry is facing, which is threatening to result in job losses that would be damaging to the economy and to many families,” it said.
Minister of Trade and Industry Rob Davies and his Economic Development counterpart Ebrahim Patel attended last week’s meeting on behalf of the government, where they promised to relax certain conditions to assist the industry. The government has committed to introducing a 10 percent import tariff while working on banning steel scrap exports, among other interventions.
A commitment was made through the Industrial Development Corporation to make R150 million available to bail out Evraz Highveld Steel, which announced this month that it would retrench nearly 1 100 workers as it battles to stay afloat. The board put the company into voluntary business rescue earlier this year.
It remains to be seen whether the state would consider a general bailout as more companies declare their inability to keep plants open, putting thousands of jobs at risk.
“Other steps taken (include) a competition probe on pricing in the industry, advice solicited from a panel of experts in the steel industry, beneficiation pilot projects (such as on fuel-cell technologies), and designation of domestically manufactured steel products for public procurement,” Zuma’s office said.
On Monday, the National Union of Metalworkers of South Africa said it would march to Pretoria to force the government to move fast on its promises.
Meanwhile, the DA has questioned Zuma’s assertion that it was not all “doom and gloom” for the economy after Statistics SA announced that the gross domestic product had contracted by 1.3 percent in the second quarter of the year. The party said it meant there would be a “real danger” that the economy could slip into recession.
The Steel and Engineering Industries Federation of Southern Africa said the industry was already in recession as steel consumption rates were similar to those of 2009’s global financial meltdown.
“The economic slowdown and possible recession are likely to lead to further job shedding, destroying the prospects of employment for the 7.6 million people looking for work,” said DA spokesman David Maynier. The party indicated there were policy options that could be considered.