Speaking at the 2nd Annual Southern African Metals and Engineering Indaba, Mr Strachan – who was the main speaker at a plenary session on Government’s policy interventions for a sustainable, globally competitive steel sector – said that the Government acknowledged the critical importance of the steel sector not only as the employer of millions of people, but also as an enabler of key economic activities. He said that the Government also acknowledged the fact that South Africa could not afford to lose its steel sector
“If we lose our steel production capabilities, we may never be able to have it back. It is, therefore, critically important that we use our comparative and competitive advantage, such as the abundance of iron ore reserves, to make sure that the steel sector not only survives, but that it is also sustainable in the long run,” Mr Strachan said.
The question was how South Africa could create an industrial policy that will result in the creation of jobs, build on competitive and comparative advantage and ensure that local steel producers enhance their export capabilities.
“The Government, through the Dti, will continue to do whatever it takes to protect local steel producers. We will make sure that we raise demand for steel through designation, which will ensure that locally-produced steel is used in projects carried ￼out by State-owned enterprises. We will also protect downstream producers through incentives, among other initiatives, and we will continue to ensure that local producers take advantage of export opportunities emanating from the rest of the African continent,” Mr Strachan said.
He added that there are already a number of initiatives put in place by the Government to ensure the sustainability of the steel sector. He used the leather sub- sector that has been able to create in access of 6 000 jobs as a result of the Government’s policy intervention.
Speaking on the same plenary session, Scaw Metals Chief Executive Officer Markus Hannemann said trade policy is key to South Africa’s growth strategy and was imperative for the survival of the local steel sector.
He expressed gratitude and appreciation to the Government for the introduction of the 10% import tariffs put in place in August last year.
“Without this recent intervention in the form of the 10% import tariff, the steel sector would be on its dead bed,” said Mr Hannemann.
Mr Hannemann also pleaded with Government to fast-track the process of putting in place more supportive measures, such as the banning of scrap metal export, to save the South African steel sector.
“We understand that the industrialization journey will take time, but I would like to plead with the Government for speed,” said Mr Hannemann.
ArcelorMittal’s Acting CEO Dean Subramanian urged the Government, labour and business to continue to work together to ensure that the steel sector does not wither into oblivion.
￼In closing, Mr Strachan said that the Dti was in the process of establishing a steel committee. Part of the function of the steel committee will be to ensure that an agreement is reached on pricing and that the sector never goes back to import parity pricing.
The 2016 conference line-up includes senior South African leaders in business, labour and Government, including Finance Minister Pravin Gordhan who will deliver the Closing Address tomorrow and Small Business Development Lindiwe Zulu, who will be the main speaker in a plenary session focusing on relations between small business and big business in the metals and engineering sector.