Johannesburg - Automotive manufacturers supported by foreign governments, particularly South Korea, were dumping automotive batteries on the South African market, JSE-listed automotive component manufacturer Metair said last week.
Theo Loock, the managing director of Metair, said the level of free market access South Africa offered international government-supported competitors was one of the major challenges domestic automotive component manufacturers faced.
Writing in the group’s latest annual report, Loock said the South Korean government had broadened its support of the Korean automotive industry beyond such successes as Kia and Hyundai to include the component industry.
“They have a specific focus on batteries, especially on lithium ion batteries and lead acid batteries. The government has invested at least $3 billion (R31bn) in support of Korean battery manufacturers.
“This has resulted in these companies being able to land batteries in South Africa at an extremely low cost,” he said.
“With the local retail battery operators less focused on responsible sourcing to support jobs in South Africa and more focused on pricing, we are facing a situation where these foreign government-supported competitors are dumping product into the South African market.”
Attempts to obtain comment from Metair on whether it had lodged a complaint with the International Trade Administration Commission (Itac) or was planning to do so were unsuccessful.
However, Thembinkosi Gamlashe, the communication manager at Itac, said last week that the commission had not received an application for the imposition of anti-dumping duties on imported car batteries.
Mpueleng Pooe, Metair’s chairman, said the group’s 2013 financial year proved to be a very important year in the second stage of Metair’s strategic path, which was designed to build the company into an international business.
Pooe said Metair’s successful acquisition for R2.7 billion of Mutlu Aku, the leading lead acid battery business in Turkey, marked the realisation of stage two of Metair’s strategy. He said the Mutlu Aku acquisition had transformed Metair into the number three lead acid battery player in the Europe, Middle East and Africa region and number one in Turkey, a position it already held in South Africa and Romania.
The Mutlu Aku acquisition was finalised only 18 months after Metair had acquired Rombat, the number one lead acid battery business in Romania.
Metair’s strategy, set in place in 2012, has five pillars and includes ensuring the business is not too reliant on a limited number of customers, products and industries by expanding into geographies outside South Africa, especially in Europe and the rest of Africa.
This pillar includes the group’s “3 X 50%” vision, which focuses on balancing revenue equally between original equipment manufacturers (OEMs) and the aftermarket and ensuring that 50 percent of the group’s revenue across both OEMs and aftermarket comes from batteries.
Pooe said Metair drew closer to achieving this goal in its 2013 financial year, with 54 percent of sales to OEMs, 46 percent to the aftermarket and non-automotive customers, and 45 percent attributable to batteries.
“With 2014 set to witness the achievement of our ‘3 X 50%’ strategy, we look forward to start implementing the next stage of Metair’s strategic path,” Pooe added. - Business Report