CAPE TOWN - R550 million investment by Turkish firm DHT Holdings into a Cape steel firm, which was shut down eight years ago, has resulted in the re-establishment of the company and the return of 300 of the retrenched workers.
The 50-year-old Cape Town Iron and Steel Works (Cisco) plant in Kuils River was shut down in 2010 and put in care and maintenance by its previous owner, listed Murray & Roberts (M&R), resulting in the loss of 360 jobs.
M&R shut the plant because it was not economically viable at the time. DHT Holdings acquired Cisco in 2012, invested R550m to expand and upgrade the steel plant, and has now returned the plant to full capacity.
Economic Development Minister Ebrahim Patel said yesterday investment was the life blood of the economy and the investment by DHT was an example of President Cyril Ramaphosa’s $100 billion (R1.26 trillion) target of fresh investments the country needed over the next five years.
The Industrial Development Corporation had partnered with DHT and supplied R250m of the investment, said Patel at the official re-opening of the plant.
DHT Holdings produces steel from scrap using electric arc furnaces.
Cisco’s products, which were typically used in the manufacturing and construction industries, were sold domestically within South Africa and exported to Southern African and other global markets.
Patel said scrap metal was a national resource, which for many years had been unutilised.
But industry foundaries and steel mills had begun to use scrap metal as an input into the production of steel products, he said.
Patel said the focus in the past 10 to 12 years was on the raw steel in the form of scrap metal, which was loaded on to containers and exported to countries such as China, India and other places.
There it was transformed into steel products, which boosted the infrastructure of those countries, he said.
Patel said DHT president Dagistan Turanli and his team saw an opportunity to help South Africans to take the country’s scrap metal and turn it into steel products.
“What we are celebrating today is that process and that partnership,” he said. Patel said the company was able to produce 80 000 tons of steel in the past year since it had been back in production.
He said this steel had gone into local products in the country and was also exported to the US, Tanzania, Kenya, Mozambique, Namibia, Botswana, Zimbabwe and Uganda.
“What they are doing is helping Africa to industrialise. Its a project that supports the continent itself with its infrastructure programme,” he said.
The Department of Economic Development issued a new directive in 2013 that gave the International Trade Administration Commission the power to bar exports of both ferrous and non-ferrous scrap metal unless the metal was first offered to domestic purchasers at a 20 percent discount to the prevailing international price.
This was an attempt by the government to come to prevent many local foundries and other beneficiators from closing down or significantly reducing their production capacity.
This discount was subsequently increased to up to 30 percent on some types of scrap metal.