Johannesburg - The five-month platinum belt strike coupled with the one-month metals strike would cost Scaw Metals R100 million, Ufikile Khumalo, the executive chairman at the integrated steel maker, said last week.
The strikes came just as group’s core objectives were to “stabilise, grow and harvest” after it was acquired by the Industrial Development Corporation (IDC) last year from Anglo American.
The IDC, the state-owned development financier, acquired 74 percent of Scaw South Africa for R3.4 billion last year as part of the government’s plan to promote competition in the local steel industry and ensure that a “developmental pricing” model to aid its infrastructure plans is adhered to.
It had taken the company three and a half years to be sold after the sale process was announced. The company now wanted to bring certainty and stability to its 6 597 employees after being spun off from Anglo, Khumalo said.
“I can say that the company is substantially stable now. On a [scale] of one to 10, I would say we are at eight, we are almost there.
“We went through a platinum and metals strike and we are trying to get employees to realise their value in the company,” Khumalo added.
Scaw had plans to benefit from the government’s multibillion-rand infrastructure roll-out, he said. But like other steel industry, Scaw operated in a challenging climate as many producers had spare capacity and imports were flooding in.
Scaw’s large reliance on electricity and the flood of cheap imports of finished goods were threats to the sustainability of the company and the growth of the local industry in general, Khumalo said.
“These risks can only be mitigated by close collaboration between the government and the industry to address developmental pricing of electricity and insisting on local manufacturing of value add. A lot of progress is being made in this regard.”
Scaw’s majority shareholder, the IDC, announced that the steel maker had posted a R166m loss in the year to March.
“A lot of time and energy has been spent on refocusing Scaw to ensure that it plays its role in the IDC industrial policy,” Gert Gouws, the IDC’s chief financial officer, said on Thursday.
The IDC had consolidated Scaw into its full financial results in the year to March.
Scaw is an unlisted entity that was founded in 1920 and operates east of Johannesburg. Its largest customers are the mining and construction sectors. The company is South Africa’s only significant producer of deep-level mining ropes.
It has operations in Australia, Italy, Zimbabwe, Ghana, Zambia and Namibia. And it is building a $40m (R442m) grinding media plant in Ghana.
“The technical specifications and the design of the Ghana plant is complete and the environmental impact assessment is under way,” Khumalo concluded.