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Jun 10, 2021





By Gerhard Papenfus

During early 2020, Ebrahim Patel, Minister of Trade, Industry and Competition, announced in a meeting with industry-role players, which included NEASA and AMSA, that Government will follow a process of consultation and thereafter propose a Steel Master Plan based on consensus. NEASA wholeheartedly expressed its support for the process.

However, much to our surprise, more duties were imposed a few months later and AMSA lodged a further application for a 120% duty on certain long products, as well as on nine new tariff codes of coated products – which AMSA does not even manufacture.

NEASA, at the time, wrote an urgent letter to Minister Patel protesting that there was no consultation with industry and that the one-sided action to further protect AMSA, does not reflect the spirit of consultation that was announced by the Minister a few months earlier.

NEASA also published an open letter in which it criticised the fact that the salary of the author of the first proposed Steel Master Plan, was funded by AMSA. The author’s name was quickly removed from the document, but the content remained fundamentally unchanged.

NEASA also complained about a proposal within the plan that SEIFSA will administrate a fund that, inter alia, would force South Africa’s SOE’s to buy AMSA’s steel, irrespective of it being more expensive. SEIFSA’s name was consequently removed.

Furthermore, NEASA requested the Minister to meet with ten independent industrialists who were fiercely upset about the new duties and the one-sided approach of Government. The Minister, however, simply ignored the request and carried on having discussions with a few handpicked role players, most of which the majority supports the duties – since they have vested interests.

A few years back, the Minister appointed NEASA on the Steel Pricing Committee, but NEASA soon withdrew after realising that it was nothing else than window-dressing. The body that was supposed to police AMSA’s pricing, was bending backwards to accommodate AMSA.

In respect of the Steel Master Plan, it was no different; the whole process of consultation was a farce. The final Steel Master Plan, which will be signed by the Minister and the said few handpicked industrialists, including AMSA, primarily still reflects the first proposal authored by someone being paid by AMSA.

The mass discontent with the status quo and the surveys that show that almost 100 percent of steel companies do not support the duties, were simply ignored.

The Steel Master Plan is the result of Minister Patel’s idea of socialist control of an industry’s affairs, not according to market forces, but according to the Minister’s idea of how an industry should be run. Keep in mind that the Minister is a Communist (he is indeed a member of the Communist Party) and an ex-trade unionist, a Minister of Trade and Industry who, unbelievably, has not conducted a business in all his life. In fact, in terms of his trade union background and Communist ideology, he has neither any understanding nor sympathy for the inner workings of business in general and, in this case, the steel industry in particular.

Tomorrow, 11 June 2021, the Minister will probably appear on national TV with great fanfare and claim success, but many will realise that his latest “master plan” will only contribute to the further demise of the South African steel industry.

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

Image Credit: Creamer Media

For more information:
NEASA Media Department

SA’s Steel crisis in three minutes

Stop the unfair steel trade practice by ArcelorMittal SA (AMSA)


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