VANDERBIJLPARK. – As steel giant ArcelorMittal ramps up both production and as-yet limited re-employment – aimed primarily at exporting quality steel to especially East Africa’s booming economies – local business has urged that local contractors be considered first.
Production and infrastructure expansion plans by AMSA CEO Kobus Verster have recently seen share prices rebounding as news of his turn-around strategy, centered on increasing steel production at all plants nationally, was absorbed by markets in recent weeks.
Verster has again confirmed AMSA’s Melt Shop facility in Vereeniging would be reopened early next year and that about 100 jobs would be created – and a new arc furnace would also be installed at the company’s flagship Vanderbijlpark Plant.
“We are already in the process of employing these people,” said Verster. News of Verster’s production increase plan was warmly welcomed by Golden Triangle Chamber of Commerce (GTCoC) CEO Klippies Kritzinger, who urged AMSA to redouble its efforts to ensure employment of local contractors and vendors. Kritzinger added the GTCoC intended intensifying its engagement with AMSA and the local steel and engineering sector to improve and better screen the selection and use of local contractors and vendors wherever possible.
“The GTCoC congratulates Kobus Verster and AMSA on their return to profitability and we need to ensure that it is sustainable for the revival of the entire Emfuleni regional economy and beyond,” Kritzinger said.
Verster – along with Vanderbijlpark Works GM Werner Venter, AMSA CFO Desmond Maharaj and AMSA Group Transformation Manager Freddie Swart – briefed media on more detailed production, financial and social responsibility aspects of his vision and strategy at AMSA’s Head Office in Vanderbijlpark last week. He again said local steel demand in South Africa was not what it could be but that international markets were booming and East African economies were growing at a very fast rate, as much as 6% annually.
AMSA would return to sustainable profitability if the South African economy could grow at just 2% per year.
Domestic consumption of steel was at a 10-year low in South Africa – despite booming international demand – and AMSA was aiming at reducing costs by $50 per tonne.
Everything possible would be done to improve AMSA’s competitive footprint and he did not envisage any significant barriers or geo-political threats to expanding exports to East Africa, Verster added.
GM Werner Venter added that road exports to the rest of Africa from South Africa faced some “slowness” at borders but this was not a major factor.