It’s no longer just
AMSA vs the STEEL DOWNSTREAM
SINCE STEEL DUTIES ARE NOT ENOUGH TO SAVE AMSA, THE STEELMAKER NOW TURNS TO OTHER AREAS TO DELAY ITS INEVITABLE DEMISE
… THIS TIME TO THE DETRIMENT OF IMPOVERISHED SOUTH AFRICANS
An uncompetitive AMSA is calling for a different form of protection – over and above the 10 percent customs duties and the further 12 percent safeguard duties. Their latest drive for protection threatens to prejudice the poor directly.
An uncompetitive AMSA, which, not long ago, as a last resort, ran to Government for protection via import – and safeguard duties, is now hinting for a further form of protection to compensate for its inability to compete as a result of their antiquated production facilities. Currently they are hinting that regulators introduce measures to the building sector to discourage the importation of, what they term, ‘low standard’ products.
This, however, is a typical example of double standards. Over and above the huge issue that the Steel Industry has with AMSA’s uncompetitive prices (made possible by Industry hostile protectionist measures), the Steel Industry is also severely prejudiced by:
• AMSA’s inferior steel, produced by their decades-old technology (in comparison to what can be imported at a lower price);
• even worse, there are certain products which AMSA does not manufacture at all, but still had the audacity to secure 22 percent protection from Government; and
• AMSA’s poor record in terms of on-time delivery.
The ‘low standard’ products that AMSA refers to, may actually be superior quality steel that is much more cost-effective than AMSA’s products. For instance, AMSA does not have the technology to manufacture ultra-thin gauge economically coated galvanised steel. This product is available from new and modern technology mills abroad and has a great advantage over the AMSA product. This is especially true with regard to impoverished citizens, where this product allows the lower-income sector an affordable form of shelter.
So, once again, who pays to safeguard the foreign owner of AMSA and his partners that emerged during the Zuma-era? Not only the Steel Downstream, but also their customers who are paying more for steel related products. Now AMSA is also targeting the poor. Who will be next?
One thing is certain: protectionist duties will not save AMSA. As long as it cannot produce high quality steel at international competitive prices, it will remain its own worst enemy. As long as AMSA is uncompetitive, which it is, duties will simply delay the inevitable:
AMSA’s ultimate departure from the South African market – in whatever form.