South Africa’s steel industry is in a state of crisis and the metals industry, including the engineering sector, has been losing 40 jobs every day in South Africa since 2008.
This was according to the Confederation of Employers of SA (Cofesa) chairperson Dr Lawrence McCrystal, who in a statement shared a concern of the Steel and Engineering Industry Federation of South Africa (Seifsa) chief operations officer-economist Tafadzwa Chibanguza, that the sector’s employment trends spelt wide-scale social and economic disaster.
Networth Investments CEO Harold Vermaak said yesterday that the bulk of the South African carbon steel production industry currently risked extinction by 2030 and in so doing was likely to take “200 000 jobs and a substantial portion of the Transnet and Eskom infrastructure with it”.
The Saldanha Steel plant has ceased operating and might be shut down indefinitely if another solution was not found.
Highveld Steel’s plant was in business rescue and had been reduced to minimal production. ArcelorMittal South Africa recently announced the closure of Newcastle Works, now delayed for six months.
“Essentially, the plants are non-profit-making factories. There is a limit to how long and for how much such plants can be kept in operation,” said Vermaak.
McCrystal, citing Seifsa data, said the steel and engineering sector was essential to the South Africa’s industrial base, converting mineral wealth to final engineered products, locking in higher degrees of value domestically and crucial for inputs in other sectors, including agriculture, mining, the automotive sector, construction and the nation’s electricity supply.
The sector was also key for exports, with 40% of total production being exported, increasing the nation’s foreign exchange receipts by $20 billion (R375bn) annually.
The difficult, fragile economy, spiking unemployment, widespread business failures and huge job losses were among the key reasons for the decline in the sector.
BUSINESS REPORT