THE imposition of a 10% ad valorem duty on imported steel would not assist downstream steel manufacturers even if the primary steel producers remained true to their undertaking not to raise prices, National Employers Association of SA (Neasa) CEO Gerhard Papenfus said on Friday.
He was reacting to the announcement by Trade and Industry Minister Rob Davies that the duty would be imposed on certain imported steel products that currently enter the country free of duty. The conditions for the approval were that steel producers refrain from increasing prices for these products and that they honour their commitments to reduce prices on some products.
The other conditions were that ArcelorMittal SA invest an additional R250m in its colour line and Safal Steel an additional R300m in its metal coating line in 2017; and that both companies commit not to retrench workers in these lines over the next three years.
On Sunday National Union of Metalworkers of SA general secretary Irvin Jim said the union welcomed the 10% levy, adding that "we worked for it".
However, he cautioned that the battle was far from over and the next issue for the union was to curb retrenchments and employers’ co-operation was necessary.
"We reject any closure of the ArcelorMittal plant (in Vereeniging) and we will work with them to ensure that it doesn’t happen," Mr Jim said.
ArcelorMittal is expected to announce on Monday whether it would close the Vereeniging plant. The company said it would comment on this only on the day.
The tariff increase is aimed at stemming the flood of cheap steel imports, particularly from China, which steel producers say is decimating the local industry.
But Mr Papenfus said there would be no benefit for downstream manufacturers, as the existing prices that would be maintained were already too high.
This, together with high labour costs, had contributed to the loss of competitiveness, industry decline and the loss of thousands of jobs. Neasa is contesting the 2014-17 wage agreement for the metal and engineering industry, which introduced pay increases of 10%, 9% and 9% over the next three years, in the Labour Court.
Mr Papenfus said the duty would protect primary producers.
source : BD live