The Department of Trade
and Industry (dti) has
revealed plans to set
up a Steel Committee
– consisting of both
government and private
sector players – to deal
with the ongoing crisis in
the steel manufacturing
sector.
Speaking in
Johannesburg recently,
deputy director general at
the dti, Garth Strachan,
said the committee would
be set up in the next few
weeks.
“The challenge will
be to ensure that steel
industry players –
primary and downstream
manufacturers – benefit
from the measures taken
to protect the industry
and ensure its ongoing
survival,” said Strachan.
He admitted that
government could perhaps
have moved faster to deal
with the steel pricing issue
but added that it also had
to proceed with caution
and look at the “bigger
picture”.
“Once
policies
have been
created, they
remain as
policy. If
we’d moved
too quickly
we may
have made
irreversible
policy
mistakes,”
said
Strachan,
appealing to
the industry
to also “come to the party”
and provide solutions.
Kaizer Nyatsumba,
CEO of the Steel and
Engineering Industries
Federation of South Africa
(Seifsa), agreed, pointing
out that South Africa could
not prosper without a
“meaningful partnership”
between government,
the private
sector and
labour.
Noting
that there
were
problems
with
compliance
around a
number of
“reciprocal
conditions”
by the
primary steel
producers
– in return
for tariff
protection against cheap
steel imports – Strachan
said the Steel Committee
would be tasked with
monitoring pricing,
production output and
investment retention.
He added that in
an attempt to assist
downstream producers,
the dti had designated
15 downstream steel
producers as “local” and
created a policy that would
see all designations include
a “local procurement”
clause for state-owned
enterprises (SOEs).
“We will soon announce
12 new downstream
producers as designated
companies,” said Strachan.
He pointed out that
there were currently 10
tariffs in place to protect
primary steel producers.
“But what is perhaps not
known is that there are
two rebate facilities in
place for downstream
manufacturers,” said
Strachan, adding that
the dti was looking into
whether the application
process for these rebates
might be “too cumbersome
or expensive”, thus
requiring a review of the
process.
Acting CEO of
Arcelormittal South
Africa (AmSA), Dean
Subramanian, tackled
the perception that the
primary steel producers,
including his company,
had agreed not to raise
steel prices as one of the
“reciprocal conditions”,
pointing out that the
producers had merely
agreed not to use
the import tariff duties
as an excuse to increase
pricing.
He commented that
there was a need to
establish a fair pricing
model that created a more
equitable way of “sharing
the pain” of the 240
million tonnes of global
overcapacity of raw steel.
INSERT & CAPTION
The challenge will
be to ensure that
steel industry players
benefit from the
measures taken to
protect the industry.
– Garth Strachan
Public/private sector committee to address steel industry crisis
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