REAL-LIFE SCENARIO 3 - STEEL INDUSTRY The ANC, AMSA, ITAC and Duties: The Four Horsemen of the downstream apocalypse.

How do the import duties affect your business?

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

Dear employer

• In recent years, South Africa has seen a massive surge in solar photovoltaic (PV) projects.

• Company XY (Pty) Ltd was previously well-equipped to supply the materials needed to manufacture PV products, including solar tracking devices, using more than 90% locally sourced raw material.

• However, the finished solar tracking devices, among other products, are now being imported duty-free from China, where production costs are much lower.

• This created an enormous competitive disadvantage as South Africa’s raw steel material cost per ton is significantly higher than the Chinese finished imports per ton.

• The absence of duties on finished imports, coupled with exorbitant duties on imported raw steel, places local manufacturers of PV products, such as Company XY (Pty) Ltd, in a precarious position.

• Without intervention, the reliance on imports threatens economic devastation and an estimated 912 direct jobs could be at risk in the renewable energy downstream fabrication alone.

• These outrageous duty structures are incentivising imports at the expense of the local economy and as a result, local manufacturers are suffering devastating financial losses.

• The disparity was brought to the attention of ITAC, however no meaningful progress has been made to protect the industry, leaving local manufacturers exposed despite clear evidence of unfair trade practices.

  
  

Imposing excessive duties on raw materials while allowing

finished imports in duty-free is not policy –

it is economic self-destruction.

For more information

NEASA Media Department

media@neasa.co.za

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