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STEEL INDUSTRY

SEIFSA REGRETS THE STEEL INDUSTRY’s DECLINE
BUT
ACTIVELY PURSUES THE CONTRIBUTING FACTORS

In a recent article published by Engineering News, Seifsa expresses great concern about the decline of the Steel Industry which is undeniably reflected by the job-losses and lower production-levels. 
 
What they fail to mention is their actions which contribute to this Steel Industry dilemma.
 
Firstly, Seifsa was the main driver to have the MEIBC Main Agreement extended to non-parties in which companies are forced to pay a minimum wage of R55.67/h for unskilled entrants. Taking into consideration the approximately 40% on-cost, this amounts to R77.00/h cost-to-company, or R13 500 per month for an entry level employee. This matter is currently the subject of litigation in the Constitutional Court.
 
Not only is this amount approximately 2.5 times that of the national minimum wage, it is also 34% more expensive than the second most expensive industry governed by bargaining council agreements, and 85% more expensive than the entry level wage governing the Steel Industry’s sister industry, the Motor Industry. This difference in rates is applicable across the entire wage schedule.
 
This does not take into account that the Steel Industry has a 40 hour workweek, whereas the industries referred to above both have a 45 hour workweek. This has a huge impact on the cost of overtime.
 
Seifsa does not mention the impact this is having on the steel downstream, simply because they know that they are responsible for this (their) job destroying dispensation.
 
Secondly, Seifsa is a signatory to the Steel Master Plan which, in fact, specifies the implementation of duties on raw material. Such duties can only have one result – it makes the manufactured product for manufactures that use this product, more expensive. This contributes towards the uncompetitiveness of the Industry. This, in turn, will result in the decline in exports and the increase of the importation of finished products.
 
How can this not contribute to the decline of the Steel Industry?
 
There are indeed many other factors which impact negatively on the Steel Industry, i.e., the energy crisis, low growth, crime and corruption, but labour costs and import duties are simply two of the most glaring factors detrimental to the Industry.

Not even mentioning it as a contributor of any sorts in the decline of the Steel Industry, in fact underscores the fact the Seifsa recognises the role they have played in bringing about this business hostile environment.

Regards,
Gerhard Papenfus

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