SAISC Commentary June 2018

Steel Awards judging has started and I must say we are really impressed with the entries this year. Despite massive challenges being felt across the industry our members are still able to deliver projects which show innovation and excellence. Things are moving slowly on the economic front and we seem to be a conflicted country and industry in just about every respect. I guess it’s only natural to put survival ahead of collaboration, but in the long term industry collaboration will show benefits for all.  

Following on from our industry meetings and CEO forum we have developed an industry paper and a number of to do lists which we will share with our members, other associations, labour and government stakeholders. We have done a great deal of work over the last few years and need to continue to push on and get our beloved steel industry back on track.

We had a wonderful site visit to Kusile Power Station and HSM (Ex Highveld Steel) together with the dti, DMR, ITAC and a few members which was a real privilege.  HSM stands out as to how you can revitalize a business in business rescue. Thank you to everyone involved.

On the project front there are certainly some green steel consuming shoots on the horizon so we must ensure that we stay positive and hopeful that we can stop the bleeding in our industry and begin to regrow. (Renewable Energy Projects, Mercedes Benz Investment, IDZ investments)  

We would like to encourage our members to continue to contribute to the conversation, particularly with respect to the urgent priorities that need to be attended to. I again have highlighted a few below but there are many more. 

  • Market demand. We need our mining industry to recover.
  • Pressure on margins, inventory, cost cutting. Industry is caught in a downsizing loop.

(What can we do that is not commercially sensitive and steers clear of competition concerns?)

  • Overcapacity across the industry.

(Discussions around rationalizing parts of the industry are high level and would require competition commission engagement.)

  • Industry relationships and collective action. “The Steel Supply Chain”
  • Government Policy including procurement and BBBEE
  • Access to new investments
  • Export competitiveness

It is still my view that competitiveness needs to form part of our relentless focus to rebuild our steel industry. It is the only certainty we have that countries and companies that invest in innovation, people and skills will survive and grow.

With the above in mind what does the SAISC do and what should it do to keep the industry moving in the right direction? Where do you think we should focus?

Paolo Trinchero
CEO, Southern African Institute of Steel Construction