AMSA vs the Steel Downstream: AMSA SHINES ON THE ASHES OF THE DOWNSTREAM

AMSA vs the STEEL DOWNSTREAM

AMSA SHINES ON

THE ASHES OF THE DOWNSTREAM

by Gerhard Papenfus

Dear Steel Industry employer

It was recently reported that AMSA recorded a record profit of R2.48 billion, the best in a decade.

This comes against the backdrop of Government’s import duties protecting AMSA, causing devastation in the downstream industry, as a result of the shortage created by AMSA, which skyrocketed prices, along with the duties which prevented the downstream from importing the shortfall.

Quite recently Government made overtures to allow the steel industry to import the raw material, duty-free; however, this did not come to fruition. It needs to be mentioned that NEASA does not support the so-called ‘rebate items’, since AMSA ultimately has to give permission for such imports which will surely not be forthcoming.

The recent looting in South Africa destroyed many businesses in a matter of days. However, the destruction caused by the import duties protecting AMSA have caused the devastation of many more steel businesses than what the unrest has caused.

Since the introduction of the duties in 2015, but before the first Covid-19 lockdown in March 2020, more than 1000 steel companies either closed their doors or were put under business rescue. The devastation caused by the lockdowns, steel shortages and high prices must have accelerated this destructive process. Despite this, Government still persists with duty protection and therefore, the demise of the steel industry will continue. This may be less obvious, and therefore less dramatic, but much more destructive than the worst of what we have recently observed.

In order to stop this continuous demise of the South African steel industry, we, once again, call on Government to remove all steel import duties, aimed at protecting the monopolistic AMSA, with immediate effect.

Gerhard Papenfus is the Chief Executive of the National Employers’ Association of South Africa (NEASA).

For more information:
NEASA Media Department
media@neasa.co.za