Johannesburg - The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has warned that instability and job losses in the industry should be of great concern to all South Africans as they could have tragic consequences for the economy and country at large.
Seifsa said yesterday that the situation should not be allowed to deteriorate further given the strategic and critical importance of the steel sector to the economy.
The industry, which is closely linked with production in the mining, construction and automotive sectors, has been on a decline since last year, forcing companies to scale down on operations or shut down some plants.
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Seifsa chief executive Kaizer Nyatsumba said the government needed to intervene through tariffs to ensure the survival of the industry.
“Steel is strategic to the economy,” said Nyatsumba. “So we need to ensure that the steel producers in the country are able to survive, are able to develop levels of competitiveness domestically and internationally and are assisted as much as possible.”
Job losses
The National Union of Metalworkers of SA (Numsa) and Solidarity also called on the government to intervene, particularly at Evraz Highveld Steel and Vanadium, where a buy-out deal by a Chinese company, International Resources, fell through,.
As a result, Evraz’s business rescue team issued a section 189 notice to its workforce charging that it was considering closing operations.
This put the jobs of more than 1 800 workers at risk. They had pinned their hopes on the Unemployment Insurance Fund’s layoff training scheme, which committed to paying their salaries until the sale went through.
“This will have devastating implications for not only the local economy but for the steel industry and South Africa as a whole. As representatives of the Highveld labour force, Solidarity and Numsa are urging the government not to allow this to happen,” the two unions said.
The unions said that if a solution was found, 1 750 skilled and well-paying jobs would be saved.
The unions said they hoped to meet President Jacob Zuma to discuss the crisis in the industry.
Although an intervention committee was set up last year with unions, the government and business to rescue the sector, role-players said benefits would only be seen in the long term.
BUSINESS REPORT