Government must establish policy certainty if it wants to continue driving industrialisation to increase economic growth, says trade union Solidarity metals and engineering deputy general secretary Willie Venter.

South Africa’s stainless steel sector is in decline, owing to the growing inability to focus on increasing economic growth through industrialisation.

“Turbulence in the key driving sectors of industrialisation – such as primary steel producers ArcelorMittal South Africa (AMSA), smelters (mining companies Glencore and Samancor), vehicle manufacturing (automotive manufacturers Ford, Toyota, Volkswagen and Mercedes) and new tyre manufacturers (Goodyear South Africa) – are sounding warnings on the unsustainability of continued manufacturing in South Africa, owing to structural pressures such as high electricity tariffs.”

This is coupled with State-owned rail company Transnet’s inability to properly manage reliable rail and port services, as well as excessive imports of cheap products, which is known as dumping, Venter adds.

These structural issues are under government control, government must attend to them and create clarity and solutions as a matter of urgency, he says.

A different strategy to those that were followed in the past is required to promote local procurement and support beneficiation, thereby strengthening the country’s stainless steel sector.

Venter adds the Steel Master Plan started with good intentions, but failed to deliver on its promise, consequently highlighting the failures of the governance structures, as oversight council and management committee meetings were not called, causing a total collapse of stakeholder oversight.

However, government continued to support the added production capacity while demand for steel diminished to well below current installed capacity levels.

“It made no sense to support overcapacity in the prevailing market conditions . . . a new Chinese steel plant is going into production on the East Rand, in Gauteng, while AMSA has to close down the Newcastle plant, in KwaZulu-Natal. [This] demonstrates just how misguided government policies are.”

The bottom line, adds Venter, is that without a policy shift there will be no relief for the local steel and associated industries and the thousands of workers in those sectors.”

Intervention Proposal, Economic Pressures

Solidarity supports the idea of a high-level tripartite steel crisis committee in principle, but is acutely aware of various steel crisis committees that were established in the past, including those for steel fabricator Highveld Steel’s business rescue process in 2016 and for AMSA in 2023.

In both instances, Venter says the committees failed to achieve the required results.

“The now defunct Steel Master Plan was supposed to introduce measures to stabilise the steel industry, but it failed to achieve this, owing to misguided government policy and uncontrolled imports, and/or dumping. A crisis committee would be worthwhile only if it is able to achieve success to address the crisis.”

Looking ahead, Solidarity remains mandate driven and will always be guided by the views and voices of its members, whether the mandates and views are raised at company level, sector level or at industry or national level.

“Solidarity will always treat the feedback from . . . members as important and convey [it] . .  as constructively as possible to the relevant company, sector or industry structure.”

The organisation follows the same strategy across all sectors when considering the salary wages and employment sustainability of members. It believes in interest-based wage negotiations – acting on members’ wage demands while considering these demands amid the sustainability of the employer, with the overarching viewpoint that fair wage demands help to ensure job security.