REAL-LIFE SCENARIO 4: Steel Industry: The ANC, AMSA, ITAC and Duties: The Four Horsemen of the downstream apocalypse.

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A REAL-LIFE SCENARIO OF AN EMPLOYER IN THE STEEL DOWNSTREAM

• Once a successful steel manufacturer employing over 150 people, Company XYZ (Pty) Ltd has become another victim of ITAC’s harmful trade policies.

• Company XYZ (Pty) Ltd shut its doors after years of battling tariff pressures and a hostile operating environment.

• Workforce growth peaked in 2014, with 152 employees, but rising operational costs together with protectionist tariffs soon began to erode its competitiveness.

• A brutal 9.4% electricity price increase, coupled with a 10%, and continuously increasing, import duty introduced in 2015 on a wide range of steel products, led to the company’s eventual demise.

• The decline was swift and severe:

  • 2014: 152 employees

  • 10% import duties on steel products and electricity hikes take hold

  • 2015: 102 employees

  • 2017: 76 employees

  • 2018: 23 employees

  • 2019: closed

• By the time Company XYZ (Pty) Ltd ceased operations, it had lost over 85% of its workforce.

• This is not an isolated case – tariffs on raw steel have greatly inflated costs for downstream manufacturers, making them less competitive against cheaper imported finished products.

For more information

NEASA Media Department

media@neasa.co.za

NEASA ... the only labour law specialist an employer will ever need.