Basket

Brief Background

The challenges faced by businesses in the diverse Metals and Engineering sector,
and especially its steel sub-industry, have the potential to further impact negatively on
production volumes, exports, margins, sustainability and jobs. Moreover, constraints
from erratic energy supply, high intermediate input costs (including electricity, raw
materials, semi-finished goods, etc.), logistics costs and high imports penetration of
components and standard parts are impediments to growth, thus rendering new
investments (such as in new plants/factories) difficult.These have extended negative
consequences for the construction industry, broader manufacturing and the local
economy in general. 

Although overlapping, the prevailing challenges faced by the various M&E sector
sub-components are significantly unique to each sub-cluster. Therefore, seeking a
blanket solution is t difficult, hence the closure of companies despite government’s best
efforts to assist. A sector-based approach in line with the Industrial Policy Action Plan is
necessary in order to deal with existing constraints, including depressed domestic and
regional market conditions. The specific idea is to develop a Steel Master Plan to
improve both short- and long-term industry prospects, to strengthen a range of regional
and global value chains and to boost technological and export competitiveness.

A Proposed Steel Master Plan

Trade and Industry Minister Ebrahim Patel is in the process of developing a Steel
Master Plan, and has appointed Dr Bernie Fanaroff to coordinate the efforts through
meetings with various stakeholders.

The intention is to ensure that the resulting Steel Master Plan is:  

    • A concise, action-oriented and implementable long-term plan; 
    • Good for investor sentiment and creates  policy certainty;
    • Results in investment and incentives structures targeting more
      employment creation and growth of the industry; and
    • Should consider perspectives and inputs from all stakeholders.

It is hoped that the proposed Steel Master Plan will provide the best platform for
businesses in the steel industry and generally across all M&E sub-components to
re-ignite commercial activity. Its spill-over effects and additional benefits to other
inter-related industries within the M&E sector will be huge. 

SEIFSA encourages member companies to submit suggestions and ideas to us, for
consideration and inclusion in the consolidated SEIFSA submission to Dr Fanaroff and
his team. 

Way forward

As soon as a draft Master Plan document is ready, there will be further engagements
with SEIFSA members and relevant captains of industry to enhance or modify the
document.  

We are keen to ensure that, in our submission, the concerns of all sub-industries within
our broad Metals and Engineering Sector are represented. Please make proposals and
outline what you would ideally want to see in the Steel Master Plan. 

Deadline for submission

The deadline for inputs to the Steel Master Plan is 21 February 2020. This will enable
SEIFSA to consolidate the inputs and compile a submission to Dr Fanaroff’s team. 

Please send your submission to our Chief Economist, Dr Michael Ade, on the address
michael.ade@seifsa.co.za.

 

Leave a Reply

SEIFSA

FREE
VIEW