Pretoria commits to saving steel industry jobs

11 Jul 2018

Business Report, 13 June 2018
ANA Reporter

CAPE TOWN– The government is committed to work with South Africa’s steel industry to save jobs and has put in place measures to save the industry from collapsing, says the Department of Trade and Industry (dti).
Briefing the Parliamentary Committee on Trade and Industry on the status of the steel industry here Tuesday, dti officials said the department had put in place measures to assist the entire value chain in the industry.
Both demand and supply measures have been deployed to assist the entire value chain to cope with the global steel glut, said the Chief Director of Capital Equipment and Metals at the department, Thandi Phele, while the acting Chief Director of Primary Minerals Processing, Dr Umeesha Naidoo, told the Members of Parliament that since the onset of the global aconomic and financial crisis in 2015, the government had established a task force which intervened to save the steel industry from closure and loss of capacity.

The task force comprises officials from the dti, the Department of Economic Development, the National Treasury and the Industrial Development Corporation, a State-owned, self-financing, national development finance institution.
Following the establishment of the task team, there are numerous short- to medium-term measures that have been put in place to support the steel industry. These include an increase in the general rate of customs duty on primary steel products to 10% and safeguard measures for a period of three years on hot rolled coil and plate products,” said Naidoo.

There are also tariff increases on a range of downstream products and the deployment of rebates where primary steel products are not locally manufactured. Tariff increases are part of an integrated set of measures being deployed to respond to the challenges and support the industry as a whole.”

More work is currently being undertaken with the South African Revenue Service (SARS) and the International Trade and Administration Commission (ITAC) on circumvention and the development of a reference price model as imports of steel products continue to threaten the viability of the steel industry.

Naidoo said there is an agreement on a set of principles for flat steel pricing in South Africa to be priced appropriately to ensure that steel-dependent industries are competitive while also ensuring that the upstream steel mills remain sustainable Phele said on the demand side, a number of steel-intensive downstream products have been designated for local content and production to take advantage of public procurement and expenditure. However, the monitoring and evaluation of the designations needs to be improved to fully realise the impact of this policy tool.