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ArcelorMittal South Africa Long-Steel Extension to Boost Economy

Steel beams. (Waldo Swiegers/Photographer: Waldo Swiegers/Blo)

(Bloomberg) -- ArcelorMittal South Africa Ltd.’s decision to continue operating its long-steel unit has given the country an opportunity to re-energize local manufacturing, Manufacturing Circle Executive Director Philippa Rodseth said.

Still, this “vital window of opportunity” to stimulate the demand side of the economy and support about 270,000 jobs needs to be supported by industry, government and labor, Rodseth said in an opinion piece published in the Business Day newspaper Wednesday. 

“This can be achieved if our factories’ fixed costs are absorbed over greater levels of volume, which, in turn, will allow us to be competitive in export markets,” she said. “Should we get this right, we will have a reinvigorated, capacitated steel value chain that is able to compete internationally.”

ArcelorMittal South Africa in February said it will delay shutting its business that makes long- steel products and cutting as many as 3,500 jobs by six months after consulting with the government and the nation’s freight company.

The firm in November said that slumping steel consumption — a proxy for the economy — coupled with South Africa’s failing power and transport systems had prompted it to stop manufacturing long-steel products, which are primarily used in construction.

Separately, ArcelorMittal South Africa stands to benefit from a recently imposed 9% duty on imports of hot-rolled steel products, which are used on railroad tracks and construction projects, Business Day newspaper reported earlier.

 

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