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Press Release - 2016/03/22: STRONGER PARTNERSHIP BETWEEN BUSINESS AND LABOUR REQUIRED TO IMPROVE SOUTHERN AFRICA’S INTERNATIONAL COMPETITIVENESS

“Without doubt, the metals and engineering sector is going through a fundamental structural adjustment, and not just a cyclical correction,” SEIFSA Chief Economist Henk Langenhoven said.

From 1994 the sector grew for 14 years by 94% until the international financial crisis of 2008-2009 hit South Africa, resulting in a 21% contraction in output that year.

Since then the sector expanded by about 6%, but the level of value added to the economy today is still 16% lower and output is 25% lower than it was during the peak of 2007/8.

“In order for the sector to recover to its full potential, innovation in terms of business solutions and better social cohesion between business and labour, in addition to policy adjustments from Government, are urgently needed,” Mr Langenhoven said.

He added that South Africa also needed to modernize production capacity and stabilize the labour market for the country to be more internationally competitive.

“The African market is very highly competitive at the moment. This is due to the fact that the rest of the world is experiencing stagnation as far as economic growth is concerned. For us to benefit from the rising African demand, we need to make sure that we are internationally competitive by using new technologies to do more with the capacity that we have and to reduce production costs by, among other things, stabilizing our expensive labour market,” Mr Langenhoven said.

He said that it was of pivotal importance, therefore, that business and labour get together and deliberate on strategies aimed at ensuring that the Southern African metals and engineering sector is internationally competitive and geared towards taking advantage of the growth opportunities emanating from the rest of the African continent and elsewhere in the world.

“Partners, Not Adversaries: How to Forge A Stronger Partnership Between Business and Labour to Improve Southern Africa’s International Competitiveness” will be one of 

the topics which will be robustly discussed at the 2016 Metals and Engineering Indaba scheduled to take place at the IDC Conference Centre in Sandton on 26-27 May 2016. Debating this crucial topic will be:

• Centre for the Study of Democracy Director, Professor Steven Friedman,
• International Labour Organisation Director Vic van Vuuren, and
• Solidarity General Secretary Gideon du Plessis, among others.

The Southern African Metals and Engineering Indaba will be attended by policy and decision makers, business owners, senior executives and other stakeholders in the metals and engineering sector in the SADC region, and will focus on the following topics, among others:

• Government Policy Interventions for a Sustainable, Globally-Competitive Steel Sector
• The Economy, Geo-Politics and Manufacturing: Has BRICS negatively affected South Africa’s Economic Relationship with the West irrevocably?
• A Delicate Balancing Act: The Link Between the Metals and Engineering Sector and the Mining, Construction and Car Manufacturing Industries
• Parasitic or Symbiotic: Relations Between Small Business and Big Business in the Metals and Engineering Sector
• Organised and hosted by SEIFSA in partnership with the Inudstrial Development Corporation, the Indaba is aimed at encouraging growth in the metals and engineering sector, which has under-performed over the past five years.

The list of the 2016 Indaba speakers and panelists includes Former President Kgalema Motlanthe, Shell South Africa Executive Chairman Mr Bonang Mohale, Black Business Council Vice-President Mr Sandile Zungu, International Monetary Fund Senior Resident Representative Dr Axel Schimmelpfennig, Executive Chairman of the EU Chamber of Commerce and Industry in Southern Africa Mr Stefan Sakoschek, US Embassy Economics Minister Mr Laird Trieber, National Empowerment Fund CEO Ms Philisiwe Mthethwa and Cadiz Corporate Solutions Director Mr Peter Major.

by SEIFSA .

Press Release - 2016/03/18: INTEREST RATE INCREASE IS “A TERRIBLE BLOW TO THE ECONOMY”

Speaking after Reserve Bank Government Lesetja Kganyago announced that the Monetary Policy Committee (MPC) had decided to increase the repo rate by another 25 basis points, following a similar increase at the MPC’s last meeting, SEIFSA Chief Economist Henk Langenhoven said the reasons for the Bank’s decision were “even worse news”.

Mr Langenhoven said the Bank’s fears of lower economic growth – which it expected to continue for at least two years – were becoming a reality, with low export potential, low consumer spending potential and stagnation in investment spending. He said the Governor’s inflation expectations was also bad news, with inflation expected to remain outside of the target range for longer, mainly driven by food price escalation and oil/fuel price increases.

Mr Langenhoven said that the weak exchange rate was of concern, with its passthrough effect expected to be higher in the coming months. He said that the current under-recovery in the oil slate will most likely lead to a full reversal in April of the recent fuel price decrease, and this was a specific sign of inflationary pressures spreading through the economy.

“From our (SEIFSA’s) own price monitoring, it is evident that the cost increases emanating from more costly imported products are already pushing production costs upwards in the metals and engineering sector.

“Although the rate increase is marginal, and the signal by the Bank of its vigilance regarding inflation is probably necessary, the impact on the survival of companies and growth may be disproportionally more costly than meets the eye. Our impression is that a large proportion of companies are walking a very tight rope between survival and closure, with even a small nudge like this likely to have the potential to push those companies into bankruptcy,” Mr Langenhoven said.

He said the Bank’s announcement was evidence of the lack of policy space by both the monetary and fiscal authorities to effect positive growth adjustments.

“It is as if the economy drifted closer and closer to stagnation accompanied by inflation, which is a lethal combination for declining wellness of individuals and companies. The latter, and the fact that the Bank’s researchers have revealed that the economy officially peaked in November 2013 and started on a downward cycle since, gives a feeling of vulnerability which is very tangibly manifested in means that do not meet ends.

“This is a very worrying situation, indeed, for individuals, companies and the country alike,” Mr Langenhoven concluded.

by SEIFSA .

Press Release - 2016/03/09: CONTINUED INFRASTRUCTURE DEVELOPMENT ESSENTIAL IN UNLOCKING AFRICA’s ECONOMIC GROWTH POTENTIAL

This important topic will be one of those discussed at the 2016 Southern African Metals and Engineering Indaba, scheduled to take place at the IDC Conference Centre in Sandton. Special attention will be paid to the thesis that countries that boast highly-developed infrastructure tend to do better than their less-developed counterparts when it comes to attracting private sector investment and FDI.

Speaking ahead of the conference, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Executive Officer Kaizer Nyatsumba said that over the years South Africa’s world-class infrastructure, among other contributing factors, has played a crucial role in positioning the country as the entry point to the rest of the African continent.

“In order to fast-track economic growth in South Africa and the rest of the Southern African Development Community (SADC) region during the prevailing turbulent economic conditions where competition is rife, countries within SADC have to develop infrastructure and transport logistics that would enable them to compete globally.

“Accelerated growth necessitates road and rail links that are continually improving,” Mr Nyatsumba said.

However, current difficult economic conditions make raising money to finance SADC’s huge infrastructure backlog difficult.

“African countries in general and countries within the SADC region in particular are in dire need of FDI. This is one of the contributing factors which saw Finance Minister Pravin Gordhan this week embarking on an international roadshow to lure foreign investment into South Africa. Infrastructure development has the potential to play a positive role in attracting FDI and private sector investment, but the difficulty in raising finance for infrastructure development poses a threat to accelerating economic growth,” Mr Nyatsumba said.

He added that without reliable infrastructure, it is almost impossible for any developing economy, including South Africa, to prosper.

“It is, therefore, of crucial importance that various stakeholders from government, labour and business get together to deliberate on strategies aimed at unlocking SADC’s economic growth through infrastructure development, among other things,” Mr Nyatsumba said.

“Southern Africa and the Huge Infrastructure Backlog – How to finance it” will be one of the topics which will be robustly discussed at the 2016 Metals and Engineering Indaba. Debating this crucial topic will be:

International Monetary Fund Senior Resident Representative Dr Axel Schimmelpfennig,
Development Bank of Southern Africa Group Executive Manager Sinazo Sibisi, and
Industrial Development Corporation Head of Basic Metals and Mining Mazwi Tunyiswa, among others.

The Southern African Metals and Engineering Indaba will be attended by policy and decision makers, business owners, senior executives and other stakeholders in the metals and engineering sector in the SADC region, and will focus on the following topics, among others:

Government Policy Interventions for a Sustainable, Globally-Competitive
Steel Sector
Partners, Not Adversaries: How to Forge A Stronger Partnership Between Business and Labour to Improve Southern Africa’s International Competitiveness
A Delicate Balancing Act: The Link Between the Metals and Engineering Sector and the Mining, Construction and Car Manufacturing Industries
Parasitic or Symbiotic: Relations Between Small Business and Big Business in the Metals and Engineering Sector

Organised and hosted by SEIFSA in partnership with the IDC, the Indaba is aimed at encouraging growth in the metals and engineering sector, which has under-performed over the past five years.

The list of the 2016 Indaba speakers and panelists includes Former President Mr Kgalema Motlanthe, Scaw Metals Group CEO Mr Markus Hannemann, Black Business Council Vice-President Mr Sandile Zungu, Centre for the Study of Democracy Director Professor Steven Friedman, Executive Chairman of the EU Chamber of Commerce and Industry in Southern Africa Mr Stefan Sakoschek, US Embassy Economics Minister Mr Laird Trieber and Massmart Chairman Mr Kuseni Dlamini.

by SEIFSA .

Press Release - 2016/03/08: SEIFSA'S SEARCH FOR 2015 TOP PERFORMING COMPANIES CONTINUES

The Federation, which launched the SEIFSA Awards for Excellence last year, has encouraged manufacturers operating in the metals and engineering sector within the Southern African region to submit their entries for the 2016 Awards before the 31 March 2016 submission deadline date.

Born out of the need to encourage growth and celebrate excellence in the metals and engineering sector, the SEIFSA Awards for Excellence offer a great opportunity for companies operating in this vital sector to receive well-deserved recognition by industry peers for their capabilities, expertise and innovation.

SEIFSA Chief Executive Officer Kaizer Nyatsumba said that the metals and engineering sector was faced with several challenges, including the prevalence of cheap imports from Asia, the lack of competitiveness in local manufacturing and policy uncertainty.

“In such turbulent economic times and a challenging business environment, we at SEIFSA believe that it is critically important for those companies which excel at what they do to get the acknowledgement and recognition that they deserve,” Mr Nyatsumba said.

The SEIFSA Awards for Excellence offer seven different categories, namely:

The Most Innovative Company of the Year, which will be awarded to a company which showed the highest level of innovation in research and development or production in 2015.

The Health and Safety Award of the Year will be offered to a company with the best legal compliance record in Health and Safety or the lowest Lost-Time Injury Frequency Rate in 2015.

Entries are also invited from companies whose Corporate Social Investment (CSI) programme/s in 2015 had a major impact on the lives of their beneficiaries.

Companies rated the highest in customer service performance in 2015 will receive the Customer Service Award of the Year.

The Most Transformed Company of the Year Award will be received by a company that showed the highest transformation level in the composition of its Board of Directors, Executive Management and Managerial Team in 2015. This award category pits companies employing fewer than 100 people against those of similar size, and companies employing more than 100 companies against others of similar size.

This is the Decade of the Artisan, and an award will be made to the company that trained the highest number of artisans in 2015.

The Environment Stewardship Award will go to a company that has made the biggest or best strides towards conserving the environment or mitigating the impact of its operations on the environment in 2015.

Mr Nyatsumba has encouraged manufacturers operating in the metals and engineering sector to submit their entries for the seven categories as soon as possible. The Awards are open to both SEIFSA members and non-members.

Winners of the 2016 SEIFSA Awards for Excellence will be honoured in a ceremony that will take place on the first day of the two-day Southern African Metals and Engineering Indaba, scheduled to take place on 26 and 27 May 2016 at the IDC Conference Centre, in Sandton.

Last year’s winners included Scaw Metals, ABB Group, Hazelton Pumps International and Voith Turbo, among others.

by SEIFSA .

Press Release - 2016/03:01: NERSA’s DECISION TO GRANT ESKOM PERMISSION TO INCREASE ELECTRICITY TARRIFS WILL FURTHER CRIPPLE THE ALREADY BLEEDING METALS AND ENGINEERING SECTOR

Speaking after NERSA’s announcement that it has approved ESKOM’s application to increase electricity rates by 9,4%, SEIFSA Chief Economist Henk Langenhoven said NERSA’s decision to approve Eskom’s application would have a crippling effect not only on the embattled metals and engineering sector, but also on the South African economy.

Mr Langenhoven added that collectively the mining, construction, auto and metals and engineering sectors contribute nearly 20% of South Africa’s gross domestic product, hence sustaining these important sectors is crucial for the economy.

“The performance of these sectors has deteriorated significantly since June last year and the outlook for the next two years remains dire. The approved electricity hike will have a crippling effect on these sectors in general and the already declining metals and engineering sector in particular. The metals and engineering sector exports 60% of its production and international competitiveness is key to survival. This electricity cost increase will erode it even further,” Mr Langenhoven said.

Production in the metals and engineering sector has not recovered since the 2008/9 financial crisis and has deteriorated further since June 2015. Production is currently 30% below the peak of 2007.

Mr Langenhoven said that most of the impact of the electricity tariff increase would be felt through the direct effects of electricity prices, which have a weight of 4,13% in the consumer price index basket. This does not show the impact on producers, of course.

The indirect effects are estimated at 0,5 percentage points during 2016,” Mr Langenhoven said.

by SEIFSA .

Skills Development Seminar Presentations - 29 February 2016

Skills Development  Seminar Presentations

1. Skills Development Seminar 2016
2. Training committee’s
3. merSETA - Mandatory grant Year 17 - FEB 2016
4. SEIFS Skills Development Seminar - 29 February 2016
5. SEIFSA - Rajen G - Skills development presentation - 12.2.2016
6. Learnership Allowance and ETI

by SEIFSA .

Press Release - 2016/02/29: THE CONTINENTAL FREE TRADE AREA IS PARAMOUNT IN UNLOCKING AFRICA’S ECONOMIC GROWTH POTENTIAL

Speaking ahead of the 2nd annual Southern African Metals and Engineering Indaba scheduled to take place in Sandton on 26 and 27 May, Mr Nyatsumba said that the Continental Free Trade Area presented many opportunities for African countries to trade among themselves and was paramount in unlocking Africa’s economic growth potential.

Turbulent economic conditions that the world was currently experiencing made it even more necessary for African countries to trade with one another in order to boost economic growth, create employment and ultimately eradicate prevalent poverty in the continent.

“Africa is the last frontier for growth owing to its rich mineral resources. This is evident in the number of international companies conducting exploration and mining activitiesmin the continent,” Mr Nyatsumba said.

He added that mining activities create opportunities in other economic sectors such as retail and manufacturing. Therefore, it was of critical importance that African countries take full advantage of opportunities presented by the Continental Free Trade Area.

Mr Nyatsumba said that although intra-African trade has increased over the years, a lot still needed to be done to improve in this regard.

According to various research findings, exports by African countries to their peers on the continent have surged by 32% since the 2008 economic downturn, compared to growth of just 5% in exports to the rest of the world. Nevertheless, in 2011 intra-African trade accounted for merely 9% of the continent’s total trade with the world, compared to 25% for Latin America and almost 50% for Asia.

“Infrastructure, red tape and boarder restrictions are but some of the serious challenges currently halting intra-African trade from thriving. These challenges need to be addressed and ultimately eradicated in order for trade among African countries to thrive,” Mr Nyatsumba said.

The Continental Free Trade Area and its Implications for Manufacturing in Southern Africa will be one of the main topics for discussion at the 2016 Indaba scheduled to take place at the Industrial Development Corporation (IDC) Conference Centre in Sandton.

Assessing the implications that the implementation of the Pan-African Continental Free Trade Area will have for the Manufacturing sector in Southern Africa will be:

• Common Market for Eastern and Southern Africa Secretary-General Mr Sindiso Ngwenya,
• SacOil Chief Executive Officer Dr Thabo Kgogo
• and Independent Director of Companies Mr Mike Spicer, among other speakers.

The Southern African Metals and Engineering Indaba will be attended by policy and decision makers, business owners, senior executives and other stakeholders in the metals and engineering sector in the SADC region, and will focus on the following topics, among others:

• Government Policy Interventions for a Sustainable, Globally-Competitive Steel Sector
• Partners, Not Adversaries: How to Forge A Stronger Partnership Between Business and Labour to Improve Southern Africa’s International Competitiveness
• A Delicate Balancing Act: The Link Between the Metals and Engineering Sector and the Mining, Construction and Car Manufacturing Industries
• Parasitic or Symbiotic: Relations Between Small Business and Big usiness in the Metals and Engineering Sector
• Southern Africa and the Huge Infrastructure Backlog - How to finance it.

Organised and hosted by SEIFSA in partnership with the IDC, the Indaba is aimed at encouraging growth in the metals and engineering sector, which has under-performed over the past five years.

The list of the 2016 Indaba speakers and panelists includes Former President Mr Kgalema Motlanthe, Scaw Metals CEO Mr Markus Hannemann, Black Business Council Vice-President Mr Sandile Zungu, International Monetary Fund Senior Resident Representative Dr Axel Schimmelpfenning, Centre for the Study of Democracy Director Professor Steven Friedman, Executive Chairman of the EU Chamber of Commerce and Industry in Southern Africa Mr Stefan Sakoschek, US Embassy Economics Minister Mr Laird Trieber and Massmart Chairman Mr Kuseni Dlamini.

Delegates booking before 31 March will enjoy a 25% discount.

by SEIFSA .

Press Release - 2016/02/25: SEIFSA WELCOMES MINISTER GORDHAN’S BUDGET

Speaking after Finance Minister Pravin Gordhan’s budget speech this afternoon, SEIFSA Chief Economist Henk Langenhoven said the budget indicated that the primary balance (current expenditure vs income) will be positive from this budget period onwards.

During his budget speech, Minister Gordhan said that the Government will:

• cut the spending ceiling over three years of the Medium-Term Expenditure Framework;
• cut consumables such as travel and vehicle purchases;
• restrict the filling of expensive vacancies and reduce headcount through betterpersonnel practices;
• contain spending by cutting R25 billion off the State’s R500 billion a year procurement spend and investigate all contracts with a value of R10 million and higher.

“These are welcome but high targets to meet. If achieved, this budget may indicate a turning point,” Mr Langenhoven said.

He added that it seemed clear that provinces and local authorities had reached their peak in terms of headcount and drag on the fiscus, with no increases in spending allocations and strong indications from the Treasury that they will have to consolidate.

This may be the benefit of Minister Gordhan’s stint at Cooperative Governance and Traditional Affairs and his intimate knowledge of the dynamics there.

Mr Langenhoven said notwithstanding the Government’s concrete plans to cut its expenditure significantly, he remained of the view that Minister Gordhan’s speech lacked solid measures to improve domestic demand.

“In the light of the very soft and hugely competitive international trade environment, one of the best stimulatory measures within the Government’s control would be to channel spending to local producers,” he said.

The Minister listed initiatives to support growth and development, many of which are commendable, such as building on the success of the independent power producers’ programme, fostering agro-processing and streamlining trade flows, among others. Mr Langenhoven expressed concern that not much was mentioned about stimulating the local economy by allocating spending to local producers.

Commenting on the extent to which the Minister’s speech re-established general confidence in Government and the country, Mr Langenhoven said that the Minister struggled to find any signs of confidence returning in terms of positive economic data.

He said that studies showed that the perceived positive impact of a weak currency on competitiveness and exports is not well founded and the decline in the terms of trade was further evidence of that.

However, the announcements of measures to enhance fiscal constraints in the face of severe pressures for expanded involvement of Government either as direct employer or spending increases contributed to confidence building.

“Much has been achieved by this budget, although uncertainties abound. Much more needs to be done to change course on complimentary policies that are inhibiting growth and investment. World economic recovery will happen, but whether South Africa will be part of such a recovery rests a great deal on its own efforts,” Mr Langenhoven concluded.

by SEIFSA .

Press Release - 2016/02/08: STRUGGLING METALS AND ENGINEERING SECTOR TO COME UNDER SCRUTINY AT INDABA

To be held at the Industrial Development Corporation (IDC) in Sandton from 26 to 27 May 2016, the 2nd annual Southern African Metals and Engineering Indaba will be officially opened by former Deputy President Kgalema Motlanthe.

The IDC’s Divisional Executive of Corporate Affairs, Zama Luthuli, said that it is important that institutions such as the IDC support such critical initiatives, given the important role of the sector in the national economy.

“The indaba provides an occasion both for industry players and Government to engage and come up with solutions to address issues impacting the sector,” said Ms Luthuli.

SEIFSA Chief Executive Officer Kaizer Nyatsumba said the Federation was delighted to welcome the IDC on board “as a strategic partner for the 2016 Metals and Engineering Indaba”.

“In many ways, the partnership between SEIFSA and the IDC, proud institutions both in their 70s, is eminently logical and sensible. SEIFSA and the IDC are instrumental in the industrialisation of the country, in our case through the contribution of the metals and engineering sector,” Mr Nyatsumba said.

Some of the issues to be discussed during the indaba include:

• Moving Forward or Going Back: Is Manufacturing in Southern Africa Doing Better than It Did a Year Ago?
• Government Policy Interventions for a Sustainable, Globally Competitive Steel Sector ransformation As a Strategic Weapon/Business Enabler in Southern Africa
• Partners, Not Adversaries: How to Forge a Stronger Partnership Between Business and Labor to Improve Southern Africa’s International Competitiveness
• A Delicate Balancing Act: The Link Between the Metals and Engineering Sector and the Mining, Construction and Car Manufacturing Industries
• The National Development Plan: What Projects are actually Being Implemented and Do We have the Necessary Human Capital?

Delegates registering for the second Southern African Metals and Engineering Indaba before mid-March will enjoy a 10% discuss. Details are available on www.meindaba.co.za.

by SEIFSA .