In an interview with Business Report, Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief executive Lucio Trentini said, “For the past two years, the steel and metals industry has been plagued by challenges.
Seifsa is a national federation that represents 18 independent employer associations in the metals and engineering sectors.
“We’ve seen increased administrative costs, like the price of petrol, the price of electricity, essentially the cost of doing business, which was greatly disrupted by uncertain and unstable and unpredictable electricity supply. And we are struggling to return to our pre-Covid-level,” he said.
"We are slowly beginning to do so, but it’s going to take some time. Russia invading Ukraine has put the wheels on a different trajectory, and an African economy being the economy that it is, we’re not the biggest economy in the world. We are suffering from what’s happening in Europe,” Trentini said.
He said the industry employed about 220 000 factory workers, and many office staff.
“There are under 9 000 companies in the industry, so it is a very strategic slog in the engine room of our economy. We supply many industries such as mining, manufacturing, and others,” he said.
“The sector employs many, many people and it is a sector that needs to create jobs. Every single job is an important job that we need to preserve. We believe that there’s still a lot to be positive about, that there’s no doubt that employers are finding it difficult to keep the doors open at the moment,” Trentini said.
There were plans to meet demand as the industry was working collaboratively with the government, organised labour and business.
“We are working in partnership to increase the ability to meet demand… From an inability to respond to capacity requirement, we are currently suffering a loss in our economy by the severe lack of demand,” Trentini said.
One of the central themes of the Steel Master Plan launched last year is to increase demand and get the engine room of the industry turning again to the levels that it was before Covid-19.
Trentini said some of the changes he would like to see in the industry resolved were the linkages between upstream primary steel producers and the suppliers, which make up the downstream fabricators.
“Those need to be clarified and made more efficient, and there needs to be a better understanding that upstream primary steel producers and downstream fabricators for the customers share the same ecosystem.
“We are all dependent on one another, and there is no win-win outlook for one or the other side to get everything they want, and that is what the market is trying to achieve,” he said.
Looking forward, Trentini said: “We are cautious. We have indicated to our members that this is the time to be prudent. This is the time to adopt a frugal approach in keeping with business operations… Inflation is on the up and the price of petrol and diesel is on the rise.
“We have an important role to play in reindustrialising this part of the economy. But it’s going to be tough. It’s going to be a hard slog, but we believe that employers represented by Seifsa are prepared to play their part,” he said.
BUSINESS REPORT