AMSA vs the Steel Downstream: A Steel Manufacturer's Story

AMSA vs the Steel Downstream: A Steel Manufacturer's Story

Dear Steel Industry employer

I have received the enclosed letter from a steel manufacturer. Please read it and then share your story by clicking here.

 XXXXXX is a 20 year old manufacturer of XXXXXXXX and related products in SA. In fact we are the only manufacturer of XXXXXXXXXXX in SA of this specific equipment. All other XXXXXXXX are imported from China. We employ 60+ people in our manufacturing process. We’re a black woman owner company, ISO  listed, and a proudly South African manufacturer. Our product all carry a SANS approval and we have a national and sub-Saharan footprint – we’re proud of this.

When XXXXX was formed we opened up as a manufacturer of XXXXXXX, XXXXXX and related product. In 2007, we had no option but to close down our manufacturing plant, lay off workers and ‘join’ everyone who was purchasing from China, as we were simply not able to compete with Chinese pricing. The primary cause was that AMSA, through their price parity model, had blown our costs out the water. In +- 2017, due to AMSA requiring Government assistance, we’re led to believe that they verbally agreed to drop the price parity costing for certain assistance, XXXXXX manufacturing was again able to compete with Chinese products. This emboldened us to believe in the future of XXXXX manufacturing in South Africa. As such we decided to take the Chinese on at their own game, not only because we believed that we could be competitive but also because we’re proud South Africans – and in our opinion the only way to ‘get South Africa right’ is to do the right thing – provide employment for all its citizens. This got us to purchase new, efficient manufacturing equipment and begin manufacturing XXXXXX, XXXXXXXX and related product all over again. The fact is that we were more competitive than the Chinese product – in fact we were +- 15% more competitive. In turn XXXXX was again able to provide employment to SA citizens.

Unfortunately, as you continually document, the downstream steel manufacturing industry has been battered by an unconcerned, inefficient Government. Since November 2020 to current we, and I’m sure all downstream steel manufacturers, have had to absorb an accumulated 72% steel increase.

The bottom line regarding the steel increases from AMSA is that they have pushed XXXXXX initial manufacturing competitiveness above and beyond those companies importing directly from China – information that I’m sure the importers, our opposition, would love to be privy to.

Gerhard, today XXXX is left in a position where we’ve successfully managed to tick the right boxes in a South African context, become the only manufacturer of our specific product and related product in South Africa, compete with the Chinese imports, and to date successfully negotiate ourselves through the strains of Covid. However, the steel price increases have left us considering closing our manufacturing plant, retrenching the majority of our work force and returning to purchase from China.

I’m not sending you this story for sympathy, but rather to substantiate the reasoning for your unfettered fight against AMSA, the Government and a certain Minister. It’s become clear that ‘what’s the right thing to do’ and what should be best for the country, is not best for South African business. The Government has driven manufacturing into a corner where manufacturers are no longer able to respect our fellow South Africans – rather we’ve been forced to selfishly embrace an attitude of ‘every man for himself’.

Minister Patel, please also take note.



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