View
216
Download
1
Category
Preview:
Citation preview
1 | P a g e
Scaw Metals June 2014 Coverage Report
Sunday Times
01 June 2014, p.5
2 | P a g e
Business Day
02 June 2014, p.10
3 | P a g e
4 | P a g e
5 | P a g e
6 | P a g e
7 | P a g e
8 | P a g e
Business Day
23 June 2014
9 | P a g e
10 | P a g e
11 | P a g e
12 | P a g e
13 | P a g e
Online
Bdlive.co.za
Nothing’s leaner than a junkyard, where rusted scrap is gold
http://www.bdlive.co.za/business/industrials/2014/06/23/nothings-leaner-than-a-junkyard-where-
rusted-scrap-is-gold
SOUTH African steel and steel products manufacturer, Scaw Metals Group, will be taking part in wire
2014 in Düsseldorf, Germany from 7 to 11 April 2014.
THE army of people sifting through rubbish bins, scouring garbage tips and going door to door in the
hunt for scrap metal has created an efficient market for the feedstock of steel makers domestically
and abroad, while creating a critical source of money for those on the fringes of society.
Scaw Metals, which is 74% owned by the Industrial Development Corporation, is one of the main
beneficiaries of this constant stream of scrap steel to make a variety of products at its vast
production facilities to the southeast of Johannesburg.
Scaw produces at least 500,000 tonnes a year of liquid steel, using scrapped metal for about 80% of
its feedstock. South Africa produces about 3-million tonnes of ferrous scrap a year, with roughly half
of that exported. Of the remaining 1.5-million tonnes, Scaw needs about a third.
It owns two businesses that secure 250,000 tonnes for its plants a year and it buys the rest from
other scrap companies.
The scrap metal sector is an almost invisible economy to the bulk of South Africans, but to those
involved it is an intensely competitive, efficient and important business, benefiting those right at the
bottom, hauling their trolleys through the streets to the big steel makers that use this metal in their
furnaces.
It is a business that puts food on the table. "It’s street gold. Scrap metal is gold on the streets and
informal settlements, and an important part of people’s lives. Without it you would see much more
poverty in the areas people live in," says Jack Janse van Rensburg, the risk and commercial manager
of Scaw’s scrap-processing division.
Scrap collectors with bakkies can earn R2,000 a day while those with trolleys can earn up to R500 a
day, bringing in between 50kg and 200kg a visit, he says, adding that it is very difficult to trace illegal
ferrous scrap compared with nonferrous scrap like copper, which has stricter legal procedures
governing it.
"Any copper coming in without documents saying where it comes from is classified as illegal and we
would not buy it. We would have to report it to various agencies," he says.
14 | P a g e
The dealership would not buy any identifiable municipal property. "Seeing illegal scrap is a rarity
because we’re a very well-known scrap buyer and dealer, and we have several processes in place to
prevent these kinds of dealings," he says.
One man, a regular client, collects enough cans in a week to raise the cash to feed his large family,
and he’s a regular client at Inyoni Metal in Vosloorus, says director and head of business Khensane
Mabange, himself a start-up entrepreneur in the scrap business.
Others use bakkies or small lorries to haul scrap to Inyoni’s dusty yard, where to the inexperienced
eye scrap metal is scattered in meaningless piles. To the trained eye, however, it has been carefully
sorted into different qualities of ferrous or iron-bearing scrap, fetching different prices in a volatile
market.
Inyoni is extremely strict about the metal coming through its gates and does not take any risks on
metal stolen from the state or the local community, he says. "I can’t risk paying R50 for a bit of metal
that will end in our business being closed down.
"We don’t buy any stolen scrap. If guys bring it to us we bar them. It’s just not allowed," Mr
Mabange says, adding that Inyoni, a registered scrap merchant, collects copies of identity
documents and cellphone numbers of sellers to closely monitor and track scrap deliveries.
The police regularly visit the yard, underpinning the need for integrity, he says, as three men arrive
separately, one with an old oil heater, another with a washing machine balanced precariously on a
wheelbarrow, and the third with a shopping trolley piled high with metal glinting in the highveld
winter sun.
Mr Mabange’s father, who worked in human resources at Scaw, made the introduction for Khensane
that led to him leaving his job as a sound engineer to start a scrap merchant business with just
R5,000 in 2004. Scaw has donated a couple of computer-linked weigh bridges to quickly process
scrap, and Inyoni is using its relationship with the steel maker to forge a collection business with
engineering companies around Johannesburg, Mr Mabange says.
"There’s an amazing amount of scrap that comes out of the townships. People are selling all kinds of
things, particularly at the end of the month to make money for rent and things," says Makhosini
Hlatshwayo, Inyoni’s financial director. "But you must know, if you can’t pay them immediately they
won’t come back. The want cash in hand and if you can’t give it to them they’ll go to the next guy
who can."
At Rand Scrap Iron, owned by Scaw, bakkies and lorries piled high with scrap from as far afield as
Bloemfontein and Limpopo queue at the gate, waiting to drive onto the weighbridge, dump their
metal, drive over a second weigh bridge and then queue again for payment. Phillip Khoza says he can
realise a profit of R1,000 a week for two loads. It means he can provide for his wife, child and
extended family.
15 | P a g e
He rents a bakkie for R500 a load, which he and a friend collect from townships around
Johannesburg, buying old fridges, washing machines and corrugated iron. "It’s very competitive.
Scrap is becoming scarce. People are starting to demand a lot of money," he says. "There is some
fighting for scrap. People set their dogs on us, saying we are stealing scrap. That’s not true. We buy
it."
Quobekiye Sithole says he sometimes drives through the night after collecting scrap in the Free
State, Mpumalanga or Limpopo, with the need for a rapid turnaround between collecting and
securing payment a key aspect of his approach.
One observer says the reason many scrap collectors drive through the night is to avoid attention
from the police as their vehicles are dangerously overloaded and barely roadworthy.
The scrap is delivered to Scaw’s yards at Union Junction, a sprawling site where the metal is melted
and turned into a variety of products for the mining and construction sectors.
Piles of scrap are fed into an enormous shredder, the only one in South Africa, where 16 giant,
hardened-steel hammers pulverise the scrap, which is then magnetically sorted into ferrous and
nonferrous scrap. The end product is flakes of metals that are delivered to the furnaces. The
shredder is so powerful that it can shred within 10 seconds a minibus taxi that has been squashed
into a small block of metal. It processes up to 1,500 tonnes of scrap in an eight-hour day, with taxi
scrap making up about 300 tonnes a month, says Mr Janse van Rensburg.
The cost of scrap now is about R3,000 a tonne, roughly R300 a tonne more than the price for most of
last year and R1,000 more than five years ago, he says, adding that there is fierce competition for
scrap, with a tenfold increase in dealers in the past three years, high international prices and strong
outflows from South Africa. The informal sector contributes about 4,000 tonnes of the 40,000
tonnes a month of scrap that Scaw buys, he says. "The informal guys take out all the nonferrous
metals and plastics. The informal sector is a very efficient system."
16 | P a g e
Online
Media Club South Africa
South Africa's economy: key sectors
http://www.mediaclubsouthafrica.com/economy/37-tmp/economy_bg/111-sa-economy-key-
sectors
South Africa's economy was traditionally rooted in the primary sectors - the result of a wealth of
mineral resources and favourable agricultural conditions. But recent decades have seen a structural
shift in output.
Since the early 1990s, economic growth has been driven mainly by the tertiary sector - which
includes wholesale and retail trade, tourism and communications. Now South Africa is moving
towards becoming a knowledge-based economy, with a greater focus on technology, e-commerce
and financial and other services.
Among the key sectors that contribute to the gross domestic product and keep the economic engine
running are manufacturing, retail, financial services, communications, mining, agriculture and
tourism.
Manufacturing
South Africa has developed an established, diversified manufacturing base that has shown its
resilience and potential to compete in the global economy.
The manufacturing sector provides a locus for stimulating the growth of other activities, such as
services, and achieving specific outcomes, such as employment creation and economic
empowerment. The sector contributed 15.2% to South Africa's GDP in 2013, making it the third-
largest contributor to the nation's economy.
Manufacturing is dominated by industries such as agro-processing, automotive, chemicals,
information and communication technology, electronics, metals, textiles, clothing and footwear.
Underpinning this sector is the Department of Trade and Industry’s (DTI) Industrial Policy Action Plan
(Ipap), which aims to achieve structural development and to increase competitiveness of South
African manufacturing.
Agro-processing
South Africa exhibits a wide range of climates - from semi-arid and dry, to sub-tropical. As a result, a
variety of crops, livestock and fish are to be found.
This industry spans the processing of freshwater aquaculture and mariculture, exotic and indigenous
meats, nuts, herbs and fruit. It also involves the production and export of deciduous fruit;
production of wines for the local and export market; confectionary manufacturing and export; and
the processing of natural fibres from cotton, hemp, sisal, kenaf and pineapple.
17 | P a g e
World-class infrastructure, counter-seasonality to Europe, vast biodiversity and marine resources,
and competitive input costs make the country a major player on the world's markets.
In 2013, Trade and Industry minister Rob Davies said the agro-processing sector is worth R49-billion
and has created as many as 207 893 jobs in the third quarter of that year. It is also significant in
sustaining the environment and growing the economy. He added that since 2008, food processing
grew by over 2% more than the manufacturing sector as a whole.
The government's New Growth Path (NGP) and National Development Plan (NDP) had both
identified agro-processing as a sector with high growth potential, despite the challenges of imports
competition, loss of market and the unstable currency and exchange rate.
Automotive
The automotive industry is one of South Africa's most important sectors, with many of the major
multinationals using South Africa to source components and assemble vehicles for both the local and
international markets.
South Africa's automotive industry is a global, turbo-charged engine for the manufacture and export
of vehicles and components. The sector accounts for about 12% of South Africa's manufacturing
exports, making it a crucial cog in the economy.
The automotive and components industry is perfectly placed for investment opportunities. Vehicle
manufacturers such as BMW, Ford, Volkswagen, Daimler-Chrysler and Toyota have production
plants in the country, while component manufacturers (Arvin Exhaust, Bloxwitch, Corning, Senior
Flexonics) have established production bases here.
The industry is largely located in two provinces, the Eastern Cape (coastal) and Gauteng (inland).
Companies with production plants in South Africa are placed to take advantage of the low
production costs, coupled with access to new markets as a result of trade agreements with the
European Union and the Southern African Development Community free trade area. Opportunities
also lie in the production of materials (automotive steel and components).
In 2013, the DTI introduced the Automotive Production Development Programme (APDP) with the
intention of increasing the volume of cars manufactured in South Africa to 1.2-million annually by
2020 as well as to diversify the automotive components chain. The APDP is a migration from the
Motor Industry Development Programme, which has affected second and third tier suppliers, and
original equipment manufacturers.
The National Association of Automobile Manufacturers (NAAM) said production, particularly those
of light motor vehicles, will rise from 2014 onward because of the APDP.
18 | P a g e
According to NAAM, average industry employment figures rose by 441 jobs in the third quarter of
2013, therefore bringing the total to 30 344 positions within the industry. New car sales also rose to
125 189 units, more than 6.4% more than in the corresponding quarter in 2012.
The local industry’s largest export market remains Europe, despite the effects the recession is having
on the Euro zone. In 2012, 66 929 vehicles were sold to Europe, 6 000 more than is sold in Africa.
However, the recession resulted in a 12.7% drop to 58 403 vehicles.
Chemicals
The chemicals industry has been shaped by the political and regulatory environment that created a
philosophy of isolationism and protectionism during the apartheid years. This tended to foster an
inward approach and a focus on import replacement in the local market. It also encouraged the
building of small-scale plants with capacities geared to local demand, which tended to be
uneconomic.
Through isolation of the industry from international competition and high raw material prices as a
result of import tariffs, locally processed goods have generally been less than competitive in export
markets. Now that South Africa is once more fully part of the global community, South African
chemical companies are focusing on the need to be internationally competitive and the industry is
reshaping itself accordingly.
The South African chemicals sector has two noticeable characteristics. Firstly, while its upstream
sector is concentrated and well developed, the downstream sector - although diverse - remains
underdeveloped. Secondly, the synthetic coal and natural gas-based liquid fuels and petrochemicals
industry is prominent, with South Africa being the world leader in coal-based synthesis and gas-to-
liquids technologies.
The industry is the largest of its kind in Africa. It is highly complex and widely diversified, with end
products often being composed of a number of chemicals that have been combined in some way.
The primary and secondary sectors are dominated by Sasol (through Sasol Chemical Industries and
Sasol Polymers), AECI and Dow Sentrachem. These companies have recently diversified and
expanded their interests in tertiary products, especially those with export potential.
In 2013, the sector was South Africa’s fourth-largest employer with 200 000 jobs and contributed
about 5% to the country’s GDP.
The Global Business Report says Africa is quickly becoming a significant chemical consumer and that
if South Africa increases trade with its neighbours, the industry could be ignited.
Information and communications technology
The South African information and communication technologies (ICT) sector is the largest and most
advanced in Africa, and is characterised by technology leadership, particularly in the field of mobile
software and electronic banking services.
19 | P a g e
With a network that is 99.9% digital and includes the latest in wireless and satellite communication,
the country has the most developed telecoms network in Africa.
South African companies are global leaders in pre-payment, revenue management and fraud
prevention systems, and in the manufacture of set-top boxes, all of which are exported successfully
to the rest of the world.
Export growth and internationalisation of South African companies is supported by the Department
of Trade and Industry via the South African Electrotechnical Export Council (SAEEC).
According to the SAECC, the South African ICT market is estimated at US$ 42.6-billion (R468.4-billion)
in 2013 with IT accounting for US$ 15.08-billion (R164-billion) and communications US$ 27.18-billion
(R297.4-billion). The sector contributes approximately 8.2% to South Africa’s GDP.
Several international corporates, recognised as leaders in the IT sector, operate subsidiaries from
South Africa, including IBM, Unisys, Microsoft, Intel, Systems Application Protocol (SAP), Dell, Novell
and Compaq.
Testing and piloting systems and applications are growing businesses in South Africa, with the
diversity of the local market, first world know-how in business and a developing country
environment making it an ideal test lab for new innovations.
Export growth and internationalisation of South African companies is supported by the Department
of Trade and Industry via the Electrotechnical Export Council (SAEEC).
The electronics industry has repeatedly demonstrated world-class innovation and production. The
industry is characterised by a handful of generalist companies with strong capabilities in professional
electronics, while small to medium companies specialise in security systems and electricity pre-
payment meters.
Investment opportunities lie in the development of access control systems and security equipment,
automotive electronic subsystems, systems and software development in the banking and financial
services sector, silicon processing for fibre optics, integrated circuits and solar cells. There are also
significant opportunities for the export of hardware and associated services, as well as software and
peripherals.
Metals
South Africa's large, well-developed metals industry, with vast natural resources and a supportive
infrastructure, represents roughly a third of all South Africa's manufacturing.
20 | P a g e
It comprises basic iron ore and steel, basic non-ferrous metals and metal products. The basic
industries involve the manufacture of primary iron and steel products from smelting to semi-finished
stages.
Primary steel products and semi-finished products include billets, blooms, slabs, forgings, reinforcing
bars, railway track material, wire rod, seamless tubes and plates.
The primary steel industry is a significant contributor to the economy and earns considerable
amounts of valuable foreign exchange.
ArcelorMittal SA, formerly Iscor and now part of global steel company ArcelorMittal, is South Africa's
largest steel producer. Other industry players are Scaw Metals, Cape Gate, Columbus Stainless Steel,
Highveld Steel and Vanadium and Cisco.
South Africa ranks 21st among the crude-steel producing countries in the world - producing in the
region of 1% of the world's crude steel. South Africa is also the largest steel producer in Africa: it is
responsible for more than half of the total crude steel production of the continent. South Africa’s
steel production bucked the global trend in 2013, increasing by 4.1%, from 6.9-millioon tonnes a
year to 7.2-million tonnes. Of that amount, the South African Iron and Steel Institute stated that
1.74-million tonnes of primary steel products were exported.
The international and local steel industry has changed dramatically over the past two years. Several
steel companies have fallen away and protectionism has increased.
To survive in these harsh conditions, the South African primary steel industry has taken major steps
to become more efficient and competitive. Many local steelworks have engaged in restructuring and
productivity improvements.
South Africa's non-ferrous metal industries comprise aluminium and other metals (including copper,
brass, lead, zinc and tin). Aluminium is the largest sector but, as South Africa has no commercially
exploitable deposits, feedstock is imported. South Africa is ranked eighth in world production of
aluminium. Key players include Billiton (with smelters in Richards Bay) and Hulett Aluminium.
Other non-ferrous metals have a lesser role, but are still important for exports and foreign exchange
earnings. Although the country's copper, brass and bronze industries have declined, it is hoped that
new mining and reclamation technologies will allow the exploitation of previously unviable deposits.
Textiles, clothing and footwear
The South African textile and clothing industry aims to use all the natural, human and technological
resources at its disposal to make it the preferred international supplier. Though the textile and
apparel industry is small, it is well placed to make this vision a reality.
21 | P a g e
In 2013, textiles and clothing accounted for about 14% of manufacturing employment and
represented South Africa's second largest source of tax revenue. The textile industry is the most
cost-effective way of creating jobs.
Owing to technological developments, local textile production has evolved into a capital-intensive
industry, producing synthetic fibres in ever-increasing proportions. The apparel industry has also
undergone significant technological change and has benefited from the country's sophisticated
transport and communications infrastructure.
The South African market demand increasingly reflects the sophistication of First World markets and
the local clothing and textile industry has grown accordingly to offer the full range of services - from
natural and synthetic fibre production to non-wovens, spinning, weaving, tufting, knitting, dyeing
and finishing.
With the US’ African Growth and Opportunity Act (Agoa) set to be renewed in 2015, the textile
industry is set to benefit even more than before. When US Congress first approved Agoa in 2000,
textile manufacturers were expected to benefit the most. Though it is not the case 14 years on – the
motor industry is the greatest beneficiary – textile exports to the US increased by 62%.
In spite of this, the industry remains vulnerable to cheap imports. China’s inclusion in the World
Trade Organisation in 2001 rocked local manufacturers as South African businesses began importing
cheaper textiles and clothing from the Asian country. Additionally, a relatively strong rand from 2003
onwards led to the industry’s decline.
As a result, the number of jobs decreased. According to Enrique Crouse, chief executive of Prilla
2000, a textile mill in Pietermaritzburg, 181 000 people were employed in the local textile industry in
2002. In 2013 there were only 80 000. However, he said the government’s rescue plan for the textile
and clothing industry, which was outlined in 2009, has done exceptionally well to recover the
industry in recent years and is in the best position it has been in a last decade.
Despite this setback, Paul Geldenhuys, general manager of Mozimax, a textile company in Tongaat,
is certain the local industry is on the mend. He said that though many economists say the weaker
rand negatively affects the economy, it can also make imports more expensive, which would
inevitably force suppliers to buy from local manufacturers.
Mining
The country is renowned for an abundance of mineral resources, accounting for a significant
proportion of both world production and reserves, and South African mining companies dominate
many sectors in the global industry. Mining and quarrying contributed 4.9% to GDP in 2013.
South Africa is the world's biggest producer of gold and platinum and one of the leading producers
of base metals and coal.
22 | P a g e
The country's diamond industry is the fourth-largest in the world, with only Botswana, Canada and
Russia producing more diamonds each year.
Although well over a century old, South Africa's mining industry is far from fully tapped. The country
is a treasure trove, with mineral deposits only matched by some countries of the former Soviet
Union.
South Africa - while holding the world's largest reserves of gold, platinum-group metals and
manganese ore - has considerable potential for the discovery of other world-class deposits in areas
yet to be exhaustively explored.
The country produces 10% of the world's gold, and has 40% of the world's known resources. It is
estimated that 36 000 tons of undeveloped resources – about one third of the world's unmined gold
– still remains.
The sector spans the full spectrum of the five major mineral categories - namely precious metals and
minerals, energy minerals, non-ferrous metals and minerals, ferrous minerals and industrial
minerals.
Apart from its prolific mineral reserves, South Africa's strengths include a high level of technical and
production expertise, and comprehensive research and development activities.
The country has world-scale primary processing facilities covering carbon steel, stainless steel and
aluminium - in addition to gold and platinum.
With the growth of South Africa's secondary and tertiary industries, as well as a decline in gold
production, mining's contribution to South Africa's gross domestic product (GDP) has declined over
the past few decades. However, this may be offset by an increase in the downstream or beneficiated
minerals industry, which the government has targeted as a growth sector.
Lucrative opportunities exist for downstream processing and adding value locally to iron, carbon
steel, stainless steel, aluminium, platinum group metals and gold.
A wide range of materials is available for jewellery - including gold, platinum, diamonds, tiger's eye
and a variety of other semi-precious stones.
The Mineral and Petroleum Resources Development Act of 2002 has opened the doors to
meaningful participation of black people in the exploration and exploitation of mineral resources.
The Act enshrines equal access to mineral resources, irrespective of race, gender or creed. When the
Act was passed, there was only one junior mining company. By mid-2008, there were 21.
South Africa's mining industry is continually expanding and adapting to changing local and
international world conditions, and remains a cornerstone of the economy, making a significant
contribution to economic activity, job creation and foreign exchange earnings.
23 | P a g e
Agriculture
Agriculture as a percentage of GDP has decreased over past four decades. This implies that the
economy has gradually become more advanced. In 1960, agriculture constituted 9,1% of the total
economy; this has decreased to only 2,2% in 2013. Though this decrease would seem to be a
negative trend from a farmer's perspective, it signals that the South African economy is reaching
maturity as the secondary and tertiary sectors become more important.
Maize is most widely grown - followed by wheat, oats, sugar cane and sunflowers. The government
has been developing programmes to promote small-scale farming and to boost job creation. Citrus
and deciduous fruits are exported, as are locally produced wines and flowers.
South Africa has both well-developed commercial farming and more subsistence-based production
in the deep rural areas.
Covering 1.2-million square kilometres of land, South Africa is one-eighth the size of the United
States and has seven climatic regions, from Mediterranean to subtropical to semi-desert.
This biodiversity, together with a coastline 3 000 kilometres long and served by seven commercial
ports, favours the cultivation of a wide range of marine and agricultural products - from deciduous,
citrus and subtropical fruit, to grain, wool, cut flowers, livestock and game.
Agricultural activities range from intensive crop production and mixed farming in winter rainfall and
high summer rainfall areas, to cattle ranching in the bushveld and sheep farming in the arid regions.
While 13% of South Africa's land can be used for crop production, only 22% of this is high-potential
arable land. The greatest limitation is the availability of water. Rainfall is distributed unevenly across
the country, with some areas prone to drought. Almost 50% of water is used for agriculture, with
about 1.3-million hectares under irrigation.
South Africa is not only self-sufficient in virtually all major agricultural products, but is also a net food
exporter. Farming remains vitally important to the economy and the development of the southern
African region.
Communications
The communications sector - which, together with transport and storage, accounted for almost 10%
of GDP in 2006 - has been one of the fastest growing of the South African economy, reflecting the
rapid expansion of mobile telephony across the country.
Fixed line penetration is estimated at 10%, while mobile penetration is significantly higher at around
93%, according to figures from the Department of Trade and Industry.
24 | P a g e
The estimated revenue generated in the telecommunications sector during 2007 was R126-billion,
and telecommunications (hardware and software) contributed an estimated additional R27-billion.
Telkom, a listed company in which the government is the biggest shareholder, was until recently the
only licensed provider of public fixed-line telecommunications services. Telkom is also a key player in
an optical fibre undersea cable project that will cater for Africa's growing telecommunications needs
for the next 25 years.
In late 2006, the government awarded Neotel a licence to become the second fixed-line operator.
The new company, which is expected to challenge Telkom with competitive prices, has been
gradually rolling out its services during 2007.
A court ruling in 2009 had added impetus, allowing value added network service providers - of which
there are about 300 in South Africa - to build their own networks. A second transatlantic cable,
Seacom, is expected to land in mid-2009.
South Africa's cellular phone market has grown phenomenally since its inception in 1994. It is also
the fourth fastest growing Groupe Speciale Mobile (GSM) market in the world.
Cellular services are provided by three licensed operators: Vodacom, MTN and Cell C. In June 2006 a
virtual cellular service provider, Virgin Mobile, was brought to life in partnership with Cell C.
The country has more than 33 million mobile phones. The introduction of number portability in
November 2006 has increased the flexibility of the mobile service industry and is expected to bolster
competition between various providers.
South Africa is also the largest Internet market in South Africa, with an estimated 4.6- to 5.4-million
users. There are still around 700 000 dial-up users, while there were 1.35-million broadband
connections at the end of 2008. Research firm World Wide Worx predicts that South Africa will show
steady Internet user growth over the next few years, reaching 8.5-million Internet users in 2013 and
9-million users in 2014.
According to the Economist Intelligence Unit's Information Industry Competitiveness Index 2008,
South Africa ranks 37th out of 66 countries reviewed, owing to well-established business and legal
sectors.
Tourism
Tourism is regarded as a modern-day engine of growth and is one of the largest industries globally.
One of the advantages of tourism as an export earner is that it is less volatile than the commodity
sector.
Tourism has been earmarked as a growth industry in South Africa, as the industry is ideally suited to
adding value to the country's many natural, cultural and other resources.
25 | P a g e
According to the World Travel and Tourism Council, tourism directly and indirectly constitutes
approximately 7% of GDP and employment in South Africa.
Some 74% of all visitors in 2006 were from mainland Africa and about 26% from overseas. About 7.9
million of the 8.5 million foreign travellers (92%) visited the country for a holiday and approximately
196 951 (2.3%) for business in 2006.
According to the World Tourism Organisation, sub-Saharan Africa attracted 2.9% of the world's
tourists in 2005. Of this percentage, South Africa has about 20.5% of market share. South Africa's
international tourism receipts amounted to $7.3-billion in 2005. Its share of total African tourist
arrivals and tourism receipts was over 34% in 2005.
The outlook for the future of the industry is positive, especially considering the 2010 Fifa World Cup.
The build-up to the event, as well as the exposure that South Africa will receive before and after the
event, will no doubt result in aggressive growth in foreign tourism. This has been a proven fact in
every country where the event has been held.
It is projected that in 2010 the South African tourism industry will employ more than 1.2 million
people either directly or indirectly.
Wholesale and retail trade
Statistics SA produces a monthly survey of the retail trade industry, covering various retail trade
enterprises.
The survey generally covers retailers in specialised food, beverages, tobacco, pharmaceutical and
medical goods, cosmetics and toiletries, general dealers, textiles, clothing, footwear, leather goods,
household furniture, appliances and equipment, hardware, paint and glass, as well as various other
dealers in miscellaneous goods.
Retail trade sales at constant (2000) prices, for the year 2006, showed an increase of 9.7% from
2005. According to Statistics SA, this is the largest increase, together with the 2004 increase, which
was also 9.7%, for any year since 2000.
According to the survey, general dealers, other retailers and retailers in textiles, clothing, footwear
and leather goods were the major contributors to the increase in retail trade sales.
Real retail sales' growth decreased in the fourth quarter from the third quarter of 2006 from 10.7%
to 9.1% year-on-year. The deceleration follows from the 200 basis point hike in interest rates during
the second part of 2006, making overall economic conditions somewhat tougher.
Among the major retailing groups are Edcon, Massmart, Pick 'n Pay, Shoprite Checkers, Mr Price
Group, Foschini Group, JD Group and Ellerines Holdings.
26 | P a g e
Finance and business services
South Africa, despite its "emerging market" status, has a sophisticated financial sector. With the
country's re-integration into the global sphere in 1994, corporate governance rules, disclosure,
transparency and accountability have become an integral part of doing business in South Africa.
Consequently, regulations governing the financial sector, and particularly risk management, have
undergone considerable refinement to align them to internationally recognised standards and best
practice.
The financial, real estate and business service sector accounted for 22% of the country's real value
added (value of total production) in 2006 and, together with other services sectors, has proved to be
a pillar of the country's economic growth over the years.
The sector boasts dozens of domestic and foreign institutions providing a full range of services -
commercial, retail and merchant banking, mortgage lending, insurance and investment.
South Africa's banking sector compares favourably with those of industrialised countries. Foreign
banks are well represented and electronic banking facilities are extensive, with a nationwide
network of automatic teller machines (ATMs). Internet banking is also available.
The Financial Services Board oversees the regulation of financial markets and institutions - including
insurers, fund managers and broking operations, but excluding banks, which fall under the South
African Reserve Bank.
The South African banking system is well developed and effectively regulated, comprising a central
bank, a few large, financially strong banks and investment institutions, and a number of smaller
banks.
Many foreign banks and investment institutions have set up operations in South Africa over the past
decade. The Banks Act is based on similar legislation in the United Kingdom, Australia and Canada.
Although no formal agreements have established a consistent international position in the area of
banking regulation, there have been amendments to exchange controls as well as financial market
legislation, making South Africa an attractive investment prospect.
The National Payment System Act of 1998 was introduced to bring the South African financial
settlement system in line with international practice. The Act confers greater powers and duties on
the SA Reserve Bank in respect of providing clearing and settlement facilities.
The Payment Association of South Africa, under the supervision of the Reserve Bank, has facilitated
the introduction of payment clearing house agreements. It has also introduced agreements
pertaining to settlement, clearing and netting agreements, and rules to create certainty and reduce
27 | P a g e
systemic and other risks in inter-bank settlement. These developments have brought South Africa in
line with international inter-bank settlement practice.
Investment and merchant banking remains the most competitive front in the industry, while the
country's "big four" banks - Absa, Standard Bank, Nedbank and FNB - continue to consolidate their
grip on the retail market.
Reserve Bank
An office headed by the Registrar of Banks, operating as part of the Reserve Bank, is responsible for
registering institutions as banks or mutual banks, and for enforcing the legislation.
The registrar acts with relative autonomy in executing his duties, but has to report annually on his
activities to the Minister of Finance, who in turn has to table this report in Parliament. The extent of
supervision entails the establishment of certain capital and liquidity requirements and the
continuous monitoring of institutions' adherence to legal requirements and other guidelines.
The performance of an individual institution is also monitored against developments in the relevant
sector as a whole. If deemed necessary, inspectors can be appointed to inspect the affairs of any
bank, or any institution or person not registered as a bank if there is reason to suspect that such an
institution or person is carrying on the business of banking.
Financial Services Board
The Financial Services Board is an independent institution established by statute to oversee South
Africa's non-banking financial services industry.
The board's mission is to promote sound and efficient financial institutions and services, together
with mechanisms for investor protection.
Major financial institutions regulated by the board include the country's exchanges and insurers,
both short term-and long-term.
Investment incentives
South Africa offers various attractive investment incentives, targeted at specific sectors or types of
business activities.
These are:
The Enterprise Investment Programme manufacturing programme
The EIP (manufacturing) is a cash grant for locally based manufacturers who wish to establish a new
production facility, expand an existing facility, or upgrade an existing facility in manufacturing
industries.
The Enterprise Investment Programme tourism support programme
28 | P a g e
The EIP (tourism) is an investment incentive grant, payable over a period of two to three years, to
support the development of tourism enterprises, and in so doing, stimulate job creation and
encourage the geographical spread of tourism investment throughout South Africa.
Tourism-related activities supported by the grant include the following:
Accommodation services
Passenger transport services
Tour operators
Cultural services
Recreational and entertainment services
Foreign investment grant
This grant seeks to compensate qualifying foreign investors for the cost of moving qualifying new
machinery and equipment from abroad to South Africa.
Critical infrastructure
The critical infrastructure fund is a cash grant for projects designed to improve critical infrastructure
in South Africa, including the following:
Transport systems - road and rail systems
Electricity transmission and distribution systems - power flow and regulation systems
Telecommunications networks - cabling and signal transmission systems
Sewage systems - network and purification
Waste storage, disposal and treatment systems
Fuel supply systems - piping for liquid, gas, and solid fuel conveyer transportation
Industrial development zones
IDZs are purpose-built industrial estates linked to international ports that leverage fixed direct
investments in value-added and export-oriented manufacturing industries.
These zones provide the following benefits:
Quality infrastructure
Expedited customs procedures
Duty-free operating environments
The location film and television production incentive
This incentive programme consists of a Large Budget Film and Television Production Rebate Scheme,
whereby foreign-owned qualifying producers are rebated a maximum of R10-million for the
production of large budget films and television productions.
The South African Film and Television Production and Co-Production Incentive Financial assistance to
South African feature films, tele-movies, television drama series, documentaries andanimation. The
29 | P a g e
objective is to contribute to the local film industry. Production budgets are required to be more than
R10-million, with the rebate being 35%, capped at R10-million.
Export marketing and investment assistance
The EMIA scheme partially compensates exporters in respect of activities aimed at developing
export markets for South African products and services, and to recruit new FDI into South Africa.
The scheme provides assistance in the form of:
Air travel expenses
Subsistence allowances
Freight-forwarding of display materials
Exhibition space and booth rental costs
The business process outsourcing and offshoring investment incentive
The BPO&O investment incentive comprises an investment grant, and a training support grant,
towards costs of company-specific training.
The incentive is offered to local and foreign investors establishing projects that aim primarily to
serve offshore clients.
Automotive production and development programme
This programme has four key elements:
Tariff reduction freeze from 2013 until 2020
Local assembly allowance
Production incentives
Automotive investment allowance
30 | P a g e
Online
Volksblad.com
Medupi wéér onder skoot
http://www.volksblad.com/sake/2014-06-30-medupi-wr-onder-skoot
Bouwerk aan Medupi en Kusile, die land se mees strategiese projekte, kom môre vir die soveelste
keer tot stilstand wanneer 220 000 staal- en ingenieurswerkers van Numsa begin staak.
Numsa het egter afgesien van sy planne om ’n onbeskermde staking by Eskom te hou – hy gaan
bloot Woensdag ’n protesoptog teen die kragreus hou omdat hy verhogings van net 5,7% aanbied.
Die vakbond eis 12%.
Seifsa, die werkgewersorganisasie in die staal- en ingenieursbedryf waartoe sowat 10 200
maatskappye behoort wat sowat 440 000 werkers in diens het, sluit van môre af alle werkers uit.
Nie-stakende werkers verloor dus ook hul lone.
Neasa, die alternatiewe werkgewersorganisasie wat die laaste jare die uitbreiding van
loonooreenkomste met Seifsa probeer nietig verklaar, gaan egter net Numsa-lede uit sy aanlegte
uitsluit, het Gideon du Plessis, hoofsekretaris van Solidariteit, die naweek gesê.
Irvin Jim, hoofsekretaris van Numsa, het gister op ’n mediakonferensie in die vakbond se
hoofkantoor in Johannesburg gesê Mildred Oliphant, minister van arbeid, wil glo met die vakbond
vergader om die staking te keer.
“Ek weet nie watter magte sy het om die staking te keer nie, maar ons sal met haar vergader as sy
wil. Ons saboteer nie die ekonomie nie – ons voer ’n veldtog vir ’n bestaansloon en die instelling van
die nasionale minimum loon – iets wat die ANC-regering veronderstel is om te doen,” het Jim gesê.
Die vergadering sal ook gebruik word om ’n verduideliking van Oliphant te vra oor lidmaatskapgeld
in die bedingingsraad wat aan die vakbond verskuldig is, maar wat teruggehou word omdat die
vakbond se lidmaatskaptalle vir die bedingingsraad nie op datum is nie.
Die staking sluit alle groot ingenieursmaatskappye in, waaronder Esor, Murray & Roberts, Alstom en
Hitachi – almal groot kontrakteurs vir werk aan die Medupi-kragstasie, wat einde vanjaar sy eerste
elektrisiteit aan die netwerk moet lewer.
31 | P a g e
Staalvervaardigers soos ArcelorMittal, Scaw Metals, Highveld Steel en Columbus Steel sal tot
stilstand kom.
Die staking sal ook ’n uitkringende uitwerking hê op onder meer onderdele-vervaardigers vir die
motorbedryf, motorvervaardigers self en die verskaffing van versterkingstaal vir die mynbedryf en
die boubedryf, veral as dit lank duur.
Werkgewers het verhogings van 8% vir werkers in onderste posvlakke aangebied en 7% vir werkers
in hoër posvlakke, maar Numsa eis 12%.
Die intreeloon van H-posvlakke vir algemene werkers is op die oomblik R5 295,53 per maand. Seifsa
se 8%-aanbod vir dié werkers sal hul loon op R5 719,38 te staan bring.
Numsa eis R5 930, R211,61 meer.
Vir D-klas werkers, wat normaalweg sweisers en masjienoperateurs insluit, is die huidige intreeloon
R7 392,29 per maand. Seifsa bied verhogings van 8% aan wat die loon op R7 983,67 per maand te
staan sal bring, maar Numsa eis R8 279,36.
32 | P a g e
Online
Beeld.com
Medupi wéér onder skoot
http://www.beeld.com/sake/2014-06-30-medupi-wr-onder-skoot
Bouwerk aan Medupi en Kusile, die land se mees strategiese projekte, kom môre vir die soveelste
keer tot stilstand wanneer 220 000 staal- en ingenieurswerkers van Numsa begin staak.
Numsa het egter afgesien van sy planne om ’n onbeskermde staking by Eskom te hou – hy gaan
bloot Woensdag ’n protesoptog teen die kragreus hou omdat hy verhogings van net 5,7% aanbied.
Die vakbond eis 12%.
Seifsa, die werkgewersorganisasie in die staal- en ingenieursbedryf waartoe sowat 10 200
maatskappye behoort wat sowat 440 000 werkers in diens het, sluit van môre af alle werkers uit.
Nie-stakende werkers verloor dus ook hul lone.
Neasa, die alternatiewe werkgewersorganisasie wat die laaste jare die uitbreiding van
loonooreenkomste met Seifsa probeer nietig verklaar, gaan egter net Numsa-lede uit sy aanlegte
uitsluit, het Gideon du Plessis, hoofsekretaris van Solidariteit, die naweek gesê.
Irvin Jim, hoofsekretaris van Numsa, het gister op ’n mediakonferensie in die vakbond se
hoofkantoor in Johannesburg gesê Mildred Oliphant, minister van arbeid, wil glo met die vakbond
vergader om die staking te keer.
“Ek weet nie watter magte sy het om die staking te keer nie, maar ons sal met haar vergader as sy
wil. Ons saboteer nie die ekonomie nie – ons voer ’n veldtog vir ’n bestaansloon en die instelling van
die nasionale minimum loon – iets wat die ANC-regering veronderstel is om te doen,” het Jim gesê.
Die vergadering sal ook gebruik word om ’n verduideliking van Oliphant te vra oor lidmaatskapgeld
in die bedingingsraad wat aan die vakbond verskuldig is, maar wat teruggehou word omdat die
vakbond se lidmaatskaptalle vir die bedingingsraad nie op datum is nie.
Die staking sluit alle groot ingenieursmaatskappye in, waaronder Esor, Murray & Roberts, Alstom en
Hitachi – almal groot kontrakteurs vir werk aan die Medupi-kragstasie, wat einde vanjaar sy eerste
elektrisiteit aan die netwerk moet lewer.
33 | P a g e
Staalvervaardigers soos ArcelorMittal, Scaw Metals, Highveld Steel en Columbus Steel sal tot
stilstand kom.
Die staking sal ook ’n uitkringende uitwerking hê op onder meer onderdele-vervaardigers vir die
motorbedryf, motorvervaardigers self en die verskaffing van versterkingstaal vir die mynbedryf en
die boubedryf, veral as dit lank duur.
Werkgewers het verhogings van 8% vir werkers in onderste posvlakke aangebied en 7% vir werkers
in hoër posvlakke, maar Numsa eis 12%.
Die intreeloon van H-posvlakke vir algemene werkers is op die oomblik R5 295,53 per maand. Seifsa
se 8%-aanbod vir dié werkers sal hul loon op R5 719,38 te staan bring.
Numsa eis R5 930, R211,61 meer.
Vir D-klas werkers, wat normaalweg sweisers en masjienoperateurs insluit, is die huidige intreeloon
R7 392,29 per maand. Seifsa bied verhogings van 8% aan wat die loon op R7 983,67 per maand te
staan sal bring, maar Numsa eis R8 279,36.
34 | P a g e
Online
Thedailymaverick.co.za
Strike of the month: Welcome to metals & engineering
http://www.dailymaverick.co.za/article/2014-06-29-strike-of-the-month-welcome-to-metals-
engineering/
On Tuesday, only a week after the resolution of the platinum strike, the National Union of
Metalworkers SA (Numsa) will embark on a strike in the metals and engineering sector. As the
factories grind to a halt, GREG NICOLSON unpacks the issues.
Negotiations that have taken place through the Metal and Engineering Industries Bargaining Council
(MEIBC) are complex, with six unions and multiple industry bodies involved. However, most of the
unions have both wage-related and non-wage related demands that have fluctuated in recent
months.
Wage demands have lowered from 20% to 15% and finally 12% recently as the 2011-2014
agreement expires on 1 July. The unions want a one-year deal. Speaking on Sunday, Numsa Deputy
General Secretary, Karl Cloete, said the union, which has 220,000 members in the metal and
engineering industries, is looking for a double-digit increase.
The previous three-year agreement, which helped secure industry stability, came after a two-week
strike in 2011. It featured 8-10% increases in the first year followed by 7-8% increases. This time, the
unions are also calling for the scrapping of labour brokers, and, in some cases, are demanding
companies don’t hire workers on the Employment Tax Incentive scheme.
The agreement will affect over 10,000 businesses and the industry has a turnover of R335 billion,
according to an employer representative, the Steel and Engineering Industries Federation of South
Africa (Seifsa). Organisations like Scaw Metals, Bell Equipment, Aveng Trident Steel, CBI African
Cables, Murray & Roberts, and Aberdare Cables are just a few of those that will be affected.
“This was not an easy decision,” said Numsa’s leadership on the decision to strike, “but a painful
one, since the principle of ‘no work no pay’ will be applied by the intransigent bosses. It has never
been in our agenda to call a strike; this strike has been imposed on us. Ours is to use the strike, as
35 | P a g e
part of a tactic to exert organisational pressure to the bosses, to return to the table and present an
offer acceptable to our members.”
While not all unions are embarking on a strike, most employees in the sector won’t be going to work
on Tuesday. Seifsa, which claims 51% of the industry’s organisations as members, issued a lockout
notice to all unions involved. That means over 200,000 workers won’t be allowed to go to work,
whether they’re on strike or not. Numsa General Secretary, Irvin Jim, said the lockout would unify
workers, as “scabs” can’t replace them. “We always smile when the bosses lock us out,” he said on
Sunday.
The decision outraged trade union Solidarity, which represents 22,000 workers in the industry, as
their members who aren’t on strike can’t work. Solidarity General Secretary, Gideon du Plessis,
praised the National Employers Association of South Africa (Neasa), which will only lock out striking
workers.
Employer bodies say their offers are generous and the unions must consider the economy. Seifsa
CEO, Kaizer Nyatsumba, recently said employers had made two “good wage offers”, but they now
think the unions were always intent on striking.
Seifsa raised its original 6.1% inflation-tied offer and has put a three-year deal on the table. Lower
paid workers would get an 8% increase in 2014, then inflation +1% in the following two years. Higher
paid employees would get 7% this year with inflation-based increases for the next two years. During
bargaining council discussions, the employers have spoken about addressing non-cost demands.
They may promise jobs created through the Employment Tax Incentive scheme will not result in a
corresponding job losses. They could also assure unions they will adhere to the new regulations on
labour broking and give all workers under labour brokers the same deal.
Mirroring positions taken in the recent platinum strike, the employer associations say double-digit
wage increases are unaffordable in the current economy. Before negotiations began, Seifsa said it
costs at least R7,000 a month to employ an entry-level worker. “Our approach to the negotiations
has been informed by the need to maintain existing jobs and to create new ones. We are concerned
that our economy has not performed well in recent years, with the metals and engineering industry
being among the sectors most threatened by cheap imports,” Nyatsumba said during negotiations in
May.
After Numsa declared its strike, the Seifsa CEO stated, “It is deeply regrettable that, at a time when
our economy is under a considerable strain, our partners in labour would fail to appreciate the
potential consequences of their actions. All of us need to accept that the world does not owe South
Africa anything. Instead, we, like all other countries, have to compete for investments and to
compete against manufacturers based in other parts of the world, who get their products here at a
cheaper price than we produce them.”
Neasa CEO, Gerhard Papenfus, continued the attack, accusing the union of not being serious about
wanting to create jobs. The strike will lead to loss of production, disrupt employee income and harm
potential investment in the country, he added.
36 | P a g e
The state is also weary of another protracted strike. Communications Minister, Faith Muthambi,
appealed to stakeholders after a cabinet meeting last week to find a resolution and help grow the
economy. The Department of Labour has contacted Numsa and the union may meet the minister
soon to discuss what can be done. The metals and engineering sectors are crucial for other
industries such as manufacturing, which has already seen a fall in output this year.
Numsa has rejected accusations that it’s sabotaging the economy. “We reject with contempt the
notion that Numsa is responsible [for the struggling economy],” said Cloete. On Sunday, the union
said it’s pushing for a living wage, as the Freedom Charter prescribes, and it’s doing so using legal
and non-violent means. “This strike is about rejecting the race to the bottom,” said Jim, claiming that
while executives continue to profit in both good and bad times, workers aren’t benefitting.
For the economy, there could be worse times ahead. Numsa can’t reach a wage agreement with
Eskom and will stage a picket this week, which could be followed by an unprotected strike. It has
accused the parastatal’s bosses of failing to address the plight of workers and if they don’t an
agreement isn’t reached soon the electricity supply could be threatened. “We will not take
responsibility for the lights being off,” said Jim, accusing Eskom of allowing the tense situation to
fester while hiding behind essential services laws, which the union is likely to challenge.
While the factories and perhaps the economy grind to a halt, negotiations continue.
37 | P a g e
Online
Bdlive.co.za Arcelor looks for a better deal
http://www.bdlive.co.za/businesstimes/2014/06/01/arcelor-looks-for-a-better-deal
ARCELORMITTAL South Africa (Amsa) is lobbying government to include steel as a designated sector
to benefit from state procurement in a bid to boost that ailing sector.
This is one of the many challenges new CEO Paul O’Flaherty will be tackling when he joins the group
in July.
In terms of preferential procurement laws, the Department of Trade and Industry can designate
specific industries in which tenders should prescribe that only locally manufactured products with a
prescribed minimum threshold for local content will be considered.
The aim is to leverage public expenditure to support economic growth, create jobs and lower the
country’s trade deficit.
The steel sector has been excluded to date, largely due to its history of colluding on prices. The
department has been at loggerheads with ArcelorMittal for years over steel pricing and has been
looking at ways to regulate “developmental” prices.
However, the current state of the sector makes it clear that the industry’s heyday of the 2000s are
over, and that more should be done to help local producers.
South Africa has steadily lost global market share over the past two decades, and significant steel-
making capacity has been lost over the past four years.
Since the global financial crisis in 2008, Cisco Steel has shut operations, Scaw Metals is being kept
alive by funding from the state-owned Industrial Development Corporation, and Amsa has shut its
electric-arc furnaces in Vanderbijl Park.
38 | P a g e
This week, Evraz Highveld Steel & Vanadium, the country’s second-biggest steel maker, posted a
R105m loss for the first quarter after its loss of R379m in 2013.
The company’s financials also raised red flags about its future as a going concern, with management
warning that the company continued to use credit lines that were committed only until year-end and
which were already fully drawn.
Amsa’s first quarter was more successful, with the steel maker posting a net profit of R322m,
compared with a loss of R276m in the corresponding period last year.
“The current business environment in South Africa is quite difficult,” said ArcelorMittal acting CEO
Hans Ludwig Rosenstock.
Demand was affected by the mining strike, a weak manufacturing sector, high imports and
customers not stocking up on product, he said.
Rising electricity tariffs, low demand growth and an increase in cheap imports had all contributed to
the sector’s woes.
ArcelorMittal was also arguing strongly against government’s proposed carbon tax, which it
estimates could cost over R600m a year. “What we can’t afford in the steel industry is an additional
load on the back,” Mr Rosenstock said.
Steel is a crucial part of the industrial sector of any economy, and retaining capacity and building a
globally competitive sector is crucial if government wants its industrialisation policies to succeed.
Countries such as South Korea, Japan and China have had government support for their steel
industries — combined with close collaboration with, for example, their automotive industries and,
in the case of China, its urbanisation drive — as a key driver of economic growth.
South Africa’s government spends billions in the form of state support for the automotive sector,
although less than 6% of the steel it uses is locally produced.
Similarly, no collaboration has taken place with steel makers and the renewable energy sector,
where better planning could have ensured using local steel for windmills, for example. It is
understood that hardly any local steel is being used in building Medupi.
By designating steel as a sector for preferential procurement, local producers would benefit from
major infrastructure expenditure by state-owned enterprises like Eskom and Transnet, said Themba
Nkosi, head of corporate affairs at ArcelorMittal.
39 | P a g e
Online
Bdlive.co.za
Mining doldrums force Scaw to look abroad
http://www.bdlive.co.za/business/mining/2014/06/02/mining-doldrums-force-scaw-to-look-abroad
THE MINING industry needs some slack as it battles a sluggish economy and strikes. But when it
comes to the rope itself, mines have little to give, as they have cut back on orders for the kilometres-
long steel ropes as thick as tree trunks.
Now Scaw Metals, one of only three large makers of the rope in the world, is being forced to drive
export sales hard to offset this and similar weaknesses in the mining and construction sectors that
make up the bulk of its local business.
CEO Markus Hannemann says there has been a distinct slowdown in demand for grinding media —
the balls used to crush ore in rotating mills and specialised wire ropes in mine shafts — with offshore
sales overshadowing local sales. But business is strong in the rest of Africa and it is an important
sales destination.
Scaw’s strategy is now in part to set up a new plant in Ghana to make grinding media. It is to import
50,000 tonnes of steel bars a year from Scaw to make them. The grinding media division, which
makes two types of balls for use in the gold, copper and platinum industries, and power plants to
grind coal to a fine powder to be injected into furnaces, is the largest in the southern hemisphere.
The company holds 90% of the Ghana project. Guma Group, a South African company, and Ghana’s
Jospong Group own the balance with an option to buy a bigger stake.
Scaw produces at least 500,000 tonnes a year of liquid steel, using scrapped metal for about 80% of
its feedstock for its plants. It intends to move away from being a supplier of primary steel products
and get more involved with secondary products such as grinding media, wire ropes, chains, cast
products and rolled products.
40 | P a g e
About a third of its liquid steel production is converted into secondary products. "We’d certainly like
to grow that number. There are other products we’d like to grow into but the dilemma we’re facing
is that we are really in such a sluggish market that even trying to consider other products is difficult,"
Mr Hannemann says.
Scaw supplies 54% of its products to the mining industry, 35% to construction, and the rail sector is
the third key source of business.
"Given the crisis in our own mining industry, we’ve become a lot more reliant on exports to keep our
business busy." Some wire divisions are now exporting 60% of product, up from 40% just a few years
ago.
"The mining groups are far more cost conscious and cautious in the way they order ropes, wanting
longer lives of ropes.
"In the last two years, everyone has been tucking their heads in. There are not as many spare ropes
in the industry as we believe there should be," Mr Hannemann says. Mine winding ropes are only
made on order to mine specifications.
The Ghana plant’s capacity would be about half that of South Africa’s, which has a hi-tech roll-
former machine to churn out perfect spheres at up to 60 a minute. It is the only such plant in South
Africa, he says.
The Ghana gold mining industry is regarded as similar in size to South Africa’s and Scaw has a "very
low market share at the moment. We see other opportunities with Jospong to grow in Ghana,
beyond just grinding media. They see a lot of Scaw’s products as a benefit to Ghana’s economy
because most of those products are imported from China, Russia, etc," Mr Hannemann says.
These include construction-type products such as rebar. "It’s not only about mining products and we
see the marketing in West Africa as an opportunity for the other engineering consumables we make.
There’s an opportunity to set up a distribution network."
The mine winding rope, used to convey people, ore and material down shafts, is a highly specialised
business, with ultrahigh-tensile ropes in demand as mining around the globe moves ever deeper.
"Other than us and two players in Europe, I don’t think there’s anyone else really producing these
ropes," Mr Hannemann says. The division has been in business for 93 years and the longest rope it
produces is 15km long. It can make ropes up to 150mm in diameter. "We are the largest integrated
steel wire and rope maker in the world."
However, there is a curious anomaly at its plants, with different power tariffs applied to its wire
plant, which straddles the Johannesburg and Germiston municipal boundary. Scaw is looking at
shifting the energy-intensive part of the plant to another facility with cheaper electricity and
supplying the plant from there to avoid the very high Johannesburg tariffs.
41 | P a g e
The wire rope business also deals with the offshore oil and gas sector, for rig moorings.
"The competitive advantages we may have had as South Africa have disappeared," Mr Hannemann
says. Electricity costs are just one challenge. The other is sourcing scrap, a problem for all firms that
use scrap, with supply and prices a concern. South Africa produces about 3-million tonnes of ferrous
scrap a year, about half of that exported. Of the remaining 1.5-million tonnes, Scaw needs about a
third a year.
Scaw owns two businesses that secure 250,000 tonnes for its plants a year and it buys the rest from
other scrap companies.
Users of scrap have approached the Department of Trade and Industry to keep as much of it in the
country as possible, but loopholes in a preferential pricing scheme have meant scrap dealers have
been able to continue selling it abroad. These loopholes are under scrutiny by the department.
"If we could just limit the export of scrap, or even go to the extreme of banning the export of scrap,
it would lead to a surplus here which would drive down scrap price," Mr Hannemann says.
"Once that happens you have a form of competitive advantage in South Africa where little foundries
can start up again and we can limit the flood of small castings from China."
A recent report said the number of foundries fell to slightly more than 200 from 450 in the 1980s.
Between 2007 and 2011, 13% of foundries closed.
Transnet has yet to award tenders for its vast recapitalisation programme. Scaw makes rail products
such as wheels, couplers and wagon sides. In its tender it has committed to investing R200m in its
business to supply Transnet and create hundreds of jobs.
The decision has taken longer than Scaw had expected. "We are a major supplier to them, with the
only facility to make cast railway wheels ... but the adjudication of these tenders seem to take
forever," Mr Hannemann says. It expects the outcome within weeks.
The construction sector has slowed remarkably since the boom ahead of the 2010 World Cup.
"Compared to 10 years ago, the demand that is coming now from mining, construction or parastatals
seems to be so fickle and sluggish, where in the past there was a consistent level of demand, even in
tough times."
The Industrial Development Corporation (IDC) owns 74% of Scaw. But the IDC is adamant Scaw is an
independent business and it has not enforced any alignment with development agendas, Mr
Hannemann says.
42 | P a g e
Online
Bdlive.co.za
VIDEO: Strike inevitable, says Numsa
http://www.bdlive.co.za/national/labour/2014/06/05/video-strike-inevitable-says-numsa
NATIONAL Union of Metalworkers of South Africa (Numsa) secretary-general Irvin Jim says the union
has reached a deadlock with employers and that, drawing from past experiences, a strike is
inevitable.
Numsa is demanding, among other things, a 15% wage increase from the Metal and Engineering
Bargaining Council (MEIBC), as well as a one-year bargaining agreement and the scrapping of labour
brokers.
While acknowledging that the 'inevitable' strike might have a severe impact on the economy, Numsa
says employers will have to take repercussions as a result of their intransigence.
Many entities, including Scaw Metals and Bell Equipment, could be affected but worst threatened is
Eskom, as electricity supply could be halted and construction delayed at Medupi, Kusile and
Inguqurha.
43 | P a g e
Online
cbn.co.za
Craig International Supplies continues African growth
http://www.cbn.co.za/manufacturing/petrochemicals-oil-and-gas/item/113-craig-international-
supplies-continues-african-growth
OIL, gas and mining companies throughout Africa benefit from the extensive experience and buying
power of global oilfield procurement company, Craig International Supplies (CIS) Pty.
“The company is now recognised as the gateway to oilfield procurement for South and West Africa
following major expansion to its network of bases and an impressive, growing client list across the
entire continent,” says Thinus von Waltsleben, Country Manager CIS Pty. Customers such as
Halliburton, Dolphin Drilling and Subsea 7, are being supplied to wherever they are from:
Angola
Nigeria
Namibia
Equatorial Guinea
DR Congo
Sierra Leone
Tanzania
Kenya
Named as the Best Supplier of the Year in the Africa Oil & Gas Awards 2013, CIS is highly proficient in
sourcing the right products and supplying them on time and on budget. Established over ten years
ago, the business also supports all major ports including Durban, Port Elizabeth, Cape Town,
Saldanha Bay and those in Namibia.
44 | P a g e
CIS has a team of specialised buyers in place to meet customers’ requirements and add value to their
supply chain. Located in the heart of Cape Town, the office and significant warehouse space enables
CIS to securely pack cargo to international standards, arrange third party inspections and organise
shipment by sea or air through global logistics partner GAC.
CIS holds around US$1m worth of stock to enable client demand to be met at short notice. The
official distributor of JetLube products in Southern Africa, CIS is also a distributor for Scaw Metals,
allowing the supply of different types of lifting equipment.
Von Waltsleben said: “With a depth of experience and a global network of bases holding substantial
stock, CIS is a market leader in its field in Africa. Our commitment to adding value and reducing costs
in the supply chain has seen us supply everything from low value consumables to high value items
including mooring and earth moving equipment, whilst also helping customers with travel
arrangements, and asseting up remote camps, which include portable offices, water supply, catering
and vehicles. Essentially, we are the go to company for procurement.”
In addition to robust processes and procedures to ensure that every order is managed effectively,
whatever the size and timescale, CIS holds a B-BBBEE rating of 6, is fully compliant with ISO. DNV
and is a member of the South African Oil and Gas Alliance (SAOGA.)
Earlier this year, the company opened a base in Ghana to serve as a hub for procurement services to
clients in-country and in neighbouring Nigeria, Cameroon and the Ivory Coast. With an office in Accra
and a warehouse in Takoradi, CIS is able to offer a vast array of on -the-ground stock ranging from
PPE, tools and lubricants to welding, consumables and lifting equipment including high usage MRO
products.
CIS also launched ebuy, the online procurement catalogue for the energy industry that gives
customers access to over 50,000 products across 1,000 categories anytime, anywhere. A fully
integrated system, ebuy has been designed to streamline the whole purchasing process and allow
customers to quickly build and track orders.
In addition, the company will be opening a base in Mozambique to further extend its service reach.
Steven Craig, Business Development Manager CIS Pty, said: “Mozambique is an important market for
CIS to expand into. It would effectively become a hub for us to widen our services into East Africa
including Tanzania and Kenya.”
CIS Pty is a division of Aberdeen headquartered Craig International Supplies Ltd, which has bases in
Houston, Ghana and Poland with another new base planned for Australia in addition to
Mozambique.
45 | P a g e
Online
miningweekly.com
Numsa says metalworker strike ''inevitable'', platinum strikers resolute
http://www.miningweekly.com/article/numsa-warns-of-metal-and-engineering-industries-strike-
2014-06-05
South Africa's main manufacturing union said on Thursday a strike was "inevitable" and the leader of
a five-month platinum walkout said his wage demands were "non-negotiable", piling more pressure
on an economy battered by labour unrest.
More than 200 000 workers led by the National Union of Metalworkers of South Africa (Numsa)
could down tools over higher pay from the beginning of July, union leaders told reporters.
"Drawing from our past experiences, a strike is inevitable," said Numsa General Secretary Irvin Jim.
"As a worker-controlled union, we will afford our members an opportunity to determine out next
course of action."
The union is demanding a one-year 15% wage increase from companies that include Bell Equipment
and Scaw Metals.
Separately, the president of the main platinum union rejected a government-brokered wage offer,
dashing hopes for an end to a strike that has cut global platinum output by 40%.
"The R12 500 rand is still non-negotiable. AMCU members are steadfast and we are not turning
back," Joseph Mathunjwa, the president of the Association of Mineworkers and Construction Union,
told Reuters, referring to the union's monthly wage demands.
46 | P a g e
About 70 000 AMCU members downed tools in January at Anglo American Platinum, Impala
Platinum, and Lonmin in a strike that has heavily affected economic output in Africa's most
advanced economy.
The walkout in the platinum belt caused South Africa's economy to contract in the first quarter and
has raised fears it could lead the country into its second recession in five years.
STRIKE SEASON
South Africa is nearing the beginning of its annual "strike season", in which unions negotiate with
employers and sometimes strike when talks go sour.
A Numsa walkout would weigh on key sectors such as auto parts supply and steel production, and
could halt work on building projects that include power utility Eskom's Kusile and Medupi power
stations.
The rand has shed about 6.5% since June last year, weighed down by sluggish economic growth and
high inflation.
Numsa said it was in separate wage negotiations talks with ArcelorMittal South Africa, a unit of the
world's top steel maker, and was "very close" to sealing an agreement.
Numsa brought auto production last year - which represents around 6% of economic output - to a
standstill with a four-week walkout at parts manufacturers
47 | P a g e
Online
newshub.org
South Africa's metalworkers union says strike ''inevitable'', platinum strikers resolute
http://za.newshub.org/south_africa_s_metalworkers_union_says_strike_inevitable_platinum_strike
rs_resolute_1126394.html
JOHANNESBURG (Reuters) - South Africa's main manufacturing union said on Thursday a strike was
"inevitable" and the leader of a five-month platinum walkout said his wage demands were "non-
negotiable", piling more pressure on an economy battered by labour unrest.
More than 200,000 workers led by the National Union of Metalworkers of South Africa (NUMSA)
could down tools over higher pay from the beginning of July, union leaders told reporters.
"Drawing from our past experiences, a strike is inevitable," said NUMSA General Secretary Irvin Jim.
"As a worker-controlled union, we will afford our members an opportunity to determine out next
course of action."
The union is demanding a one-year 15 percent wage increase from companies that include Bell
Equipment and Scaw Metals.
Separately, the president of the main platinum union rejected a government-brokered wage offer,
dashing hopes for an end to a strike that has cut global platinum output by 40 percent.
48 | P a g e
"The 12,500 rand (694.7 pounds) is still non-negotiable. AMCU members are steadfast and we are
not turning back," Joseph Mathunjwa, the president of the Association of Mineworkers and
Construction Union (AMCU), told Reuters, referring to the union's monthly wage demands.
About 70,000 AMCU members downed tools in January at Anglo American Platinum, Impala
Platinum, and Lonmin in a strike that has heavily affected economic output in Africa's most
advanced economy.
The walkout in the platinum belt caused South Africa's economy to contract in the first quarter and
has raised fears it could lead the country into its second recession in five years.
South Africa is nearing the beginning of its annual "strike season", in which unions negotiate with
employers and sometimes strike when talks go sour.
A NUMSA walkout would weigh on key sectors such as auto parts supply and steel production, and
could halt work on building projects that include power utility Eskom's Kusile and Medupi power
stations.
The rand has shed about 6.5 percent since June last year, weighed down by sluggish economic
growth and high inflation.
NUMSA said it was in separate wage negotiations talks with ArcelorMittal South Africa, a unit of the
world's top steel maker, and was "very close" to sealing an agreement.
NUMSA brought auto production last year - which represents around 6 percent of economic output -
to a standstill with a four-week walkout at parts manufacturers.
49 | P a g e
Online
politicsweb.co.za
We'll go on strike on July 1 if our demands our not met - NUMSA
http://www.politicsweb.co.za/politicsweb/view/politicsweb/en/page71619?oid=630347&sn=Marke
tingweb%20detail
The National Union of Metalworkers of South Africa (Numsa) representing more than 220 000 super-
exploited workers in the strategic layer of our economy - the Engineering/Metals sector, might
embark on a full-blown strike, as from the beginning of July 01, 2014.
The anticipated strike action is due to the fact that the employers in the industry have arrogantly
failed to meet our demands.
Already the Spokespersons of capital have punted our anticipated strike as a deliberate attempt by
Numsa elected leadership to flex its political muscle in order to undermine the governing party - the
African National Congress (ANC).
False alarm bells are being raised that if Numsa goes on strike as anticipated, our country, which is
bleeding and shedding jobs, might suffer a second bug of the recession.
Interestingly, none of these Spokespersons of capital are condemning the bosses' continued
onslaught against our hard-fought collective bargaining dispensation.
50 | P a g e
The negotiations were held at the backdrop of a soaring crisis at the main center of global capitalism
and imperialism - the United States (US) and Europe, where there is massive shrinking of
manufacturing, and a shift into insecure services, especially finance, retail, security and so-called
"knowledge production" tertiary sectors. Despite the slowdown in the global economy, capital
continues to make huge profits by increasing the suffering of the working class.
In our own South African context, the negotiations took place amidst the ideological fog being
spread by the politicians of "a good story to tell", whilst our people, especially the working class and
the poor, are confronted with the crisis of poverty, unemployment and inequality.
This crisis is a result of the failures by the African National Congress (ANC)-led government to
radically transform the ownership and control patterns of the South African economy, as expressed
in the Freedom Charter.
We have long maintained this position. Therefore it is not about flexing of political muscles to
undermine the new administration, as spokespersons of white monopoly capital are saying.
On a daily basis, we are being fed lies that the neoliberal National Development Plan (NDP) is a good
story vision, and that our country has become a better place to live since the negotiated settlement
of 1994. However we know that there has already been a failure to achieve Vision 2014, which was
presented to us in 2004.
Overall, the 20 years of democracy has been a disastrous to the working class of our country. It has
been 20 years of:
higher rates of racialised poverty and unemployment;
higher levels of inequality,
inferior education system;
collapsed public health-care;
dehumanizing living conditions;
In fact, this has been a bad story to tell for the majority of our people, and a good story to tell by
White monopoly capital, which has benefited immensely since the dawn of democracy. The past 20
years have been white monopoly capitalist democracy.
Most of our members organised in this sector live in shacks and informal settlements, their wages
are insufficient to afford decent housing and other important basic necessities.
The bosses use the squalid conditions of our members as the basis to refuse them decent wages in
order for them to afford a decent life. The bosses are only interested in extracting huge profits from
our labour and exporting them to the capitalist centers in London, Germany, New York and Sandton.
Our lowest paid members, those who work in gate and fencing and contract workers for capital built
projects such as Medupi and Kusile earn a paltry R3050 per month while it is common cause that
these contracting companies are reaping millions of rands from their contracts with Eskom. The 15%
51 | P a g e
increase we are demanding will only improve their salaries by R450 a month. How can this be
construed as an outrageous demand? General engineering scheduled employees earn poverty
wages of R5300 per month while the CEOs in this industry continue to earn millions.
We doubt that these overpaid representatives of the capitalist class spend less than R5300 on just
their cellphone costs for the month while workers are supposed to carve out an existence on this
pittance of a salary. Gary Bell, the CEO of Bell Equipment took home R3.1 million in 2011, nearly 50
times more than his own workers who he expects to be productive and enthusiastic on a daily basis.
Over 20% of workers' disposable income is spent on the cost of transport because of the persisting
legacy of apartheid social engineering, and its settlement patterns, which has ensured that Africans
in particular and Blacks in general, live far from workplaces.
The bargaining negotiations have spectacularly failed to produce the desired outcomes as expected
by the thousands of our members in the sector.
The employer bodies, particularly Steel and Engineering Industries Federation of South Africa
(SEIFSA), National Employers Association of South Africa (NEASA) and Boarder Industry Association
(BIA) are hell-bent on retaining and perpetuating the colonial apartheid wage income disparities.
The first phase of the negotiations took place on the week of March 26-27, 2014; the second phase
on the week of April 16, 2014; third phase on the week of May 8-9, 2014; fourth phase on the week
of May 21-23, 2014; fifth phase on week of May 28-29.
On May 30, 2014 we declared a dispute with the employer bodies under the auspices of Metal and
Engineering Bargaining Council (MEIBC).
We declared the dispute purely because we strongly believe that we have exhausted all possible
avenues for employers to concede to our demands, as mandated by our members.
We went to these Engineering and Metals sector wage negotiations guided by the following
principles, which underpinned our Collective Bargaining Strategy:
Closing the colonial apartheid wage gap, fighting for equity in the workplace and demanding
a Living Wage;
No to down variation to the worker's conditions of employment;
The democratization of the workplace;
Reduce excessive pay for the Bosses;
Developing the skills of the workforce that was deprived of that development during
colonial-apartheid past; AND
Use the collective bargaining to organise the unorganised and thereby growing Numsa into a
formidable fighting force.
52 | P a g e
We are currently busy consulting our members across the length and breadth of our country as part
of our "Ear to the Ground Campaign", to renew our mandates since the negotiations have reached a
dead-end.
It is quite evident that the employers are imposing a strike onto us; and the strike has never been on
our agenda, purely because our core demands are affordable.
But as a worker-controlled union, we will afford our members an opportunity to determine our next
course of action, as part of exploring other strategies to be applied to exert pressure on the bosses
to concede to our demands.
Drawing from our past experiences, a strike is inevitable.
We are fully aware of the huge burden the strike can have on our members, since the bourgeois
principle of No Work! No Pay will be applied by the bosses.
However, reading from the mood of our members, it is a sacrifice they are ready to make, conscious
of the fact that their united power can shake the bosses and halt production.
In the event the strike takes place, the following key sectors will be heavily affected, namely
foundries, electronics and telecommunications, plastic, fabrication industries, machinery and
equipment, automotive components sector, electrical engineering, basic metals, heavy and light
engineering, gate and fence, and construction engineering.
Major companies that will be affected include Scaw Metals, Bell Equipment, CBI, Union Carriage and
Wagon, Dorbyl, Marley Pipe Stystem and Dana Spicer Axle amongst others. Some of these
companies supply critical parts to the auto industry and could have a disastrous impact on their
already strained supply obligations. We currently have a crisis of security of supply of electricity and
if the strike commences, ongoing work at Medupi, Kusile and Ingqurha will be delayed. Employers in
the metals and engineering industry will have to take full responsibility for the repercussions this
strike will have on the economy as a result of their intransigence. Workers have nothing to offer to
themselves.
These are our core demands;
(1) 15% wage increase;
(2) 1 year bargaining agreement;
(3) Scrapping of Labour Brokers;
(4) Wage negotiations must benefit all workers irrespective of salaried or wage earners;
(5) Extension of the scope of the Main Agreement; AND
(5) Remove the short and layoff from the Main Agreement.
Our demands should be located and understood within the context of rising cost of living, excessive
executive pay and high inequality, grinding poverty and crisis of unemployment in our country.
53 | P a g e
Once again, Eskom is offering workers a pathetic 4.3% increase in salaries, far below the inflation
rate and which therefore translates into a wage cut. This takes place at a time when Eskom is
requesting R500 million for renovations at their head office. The former CEO of Eskom took home
R8.64 million last year while the total remuneration to directors last year amounted to over R52
million.
This is daylight robbery of state resources that should be directed to ensuring security of supply and
offering workers a living wage. Numsa is finally ready to take to the streets and withdraw its labour
at an unprecedented level, we will not be held hostage by essential service designations and the
union will not be responsible for any consequences that arise from workers being forced to strike.
Lastly, the National Union of Metalworkers of South Africa sends our militant solidarity to the
courageous workers who are currently on strike on the Platinum Belt. Their ongoing battle exposes
the fact that the South African working class rejects the continued super exploitation of black and
African labour. Metalworkers join the voices of these workers in demanding the end of colonial wage
patterns. Numsa calls on the employers in the platinum mining industry to meet the demands of
these workers.
We call on all employers in the industry to use this period between now and 30 June to come to the
table and make an offer that meets the fair and just demands of our members failing which we will
strike as our last resort.
Online
Sharenet.co.za
South Africa's metalworkers union says strike ''inevitable'', platinum strikers resolute
http://www.sharenet.co.za/news/South_Africas_metalworkers_union_says_strike_inevitable_platin
um_strikers_resolute/fd1c5146df06d9894c099b05e418f3f0
JOHANNESBURG (Reuters) - South Africa's main manufacturing union said on Thursday a strike was
"inevitable" and the leader of a five-month platinum walkout said his wage demands were "non-
negotiable", piling more pressure on an economy battered by labour unrest.
More than 200,000 workers led by the National Union of Metalworkers of South Africa (NUMSA)
could down tools over higher pay from the beginning of July, union leaders told reporters.
"Drawing from our past experiences, a strike is inevitable," said NUMSA General Secretary Irvin Jim.
"As a worker-controlled union, we will afford our members an opportunity to determine out next
course of action."
The union is demanding a one-year 15 percent wage increase from companies that include Bell
Equipment and Scaw Metals.
54 | P a g e
Separately, the president of the main platinum union rejected a government-brokered wage offer,
dashing hopes for an end to a strike that has cut global platinum output by 40 percent.
"The 12,500 rand (694.7 pounds) is still non-negotiable. AMCU members are steadfast and we are
not turning back," Joseph Mathunjwa, the president of the Association of Mineworkers and
Construction Union (AMCU), told Reuters, referring to the union's monthly wage demands.
About 70,000 AMCU members downed tools in January at Anglo American Platinum, Impala
Platinum, and Lonmin in a strike that has heavily affected economic output in Africa's most
advanced economy.
The walkout in the platinum belt caused South Africa's economy to contract in the first quarter and
has raised fears it could lead the country into its second recession in five years.
South Africa is nearing the beginning of its annual "strike season", in which unions negotiate with
employers and sometimes strike when talks go sour.
A NUMSA walkout would weigh on key sectors such as auto parts supply and steel production, and
could halt work on building projects that include power utility Eskom's Kusile and Medupi power
stations.
The rand has shed about 6.5 percent since June last year, weighed down by sluggish economic
growth and high inflation.
NUMSA said it was in separate wage negotiations talks with ArcelorMittal South Africa, a unit of the
world's top steel maker, and was "very close" to sealing an agreement.
NUMSA brought auto production last year - which represents around 6 percent of economic output -
to a standstill with a four-week walkout at parts manufacturers.
55 | P a g e
Online
Trulegalmedia.com
We’ll go on strike on July 1 if our demands our not met – NUMSA
http://trulegalmedia.com/well-go-on-strike-on-july-1-if-our-demands-our-not-met-numsa/
The National Union of Metalworkers of South Africa (Numsa) representing more than 220 000 super-
exploited workers in the strategic layer of our economy - the Engineering/Metals sector, might
embark on a full-blown strike, as from the beginning of July 01, 2014.
The anticipated strike action is due to the fact that the employers in the industry have arrogantly
failed to meet our demands.
Already the Spokespersons of capital have punted our anticipated strike as a deliberate attempt by
Numsa elected leadership to flex its political muscle in order to undermine the governing party - the
African National Congress (ANC).
False alarm bells are being raised that if Numsa goes on strike as anticipated, our country, which is
bleeding and shedding jobs, might suffer a second bug of the recession.
56 | P a g e
Interestingly, none of these Spokespersons of capital are condemning the bosses' continued
onslaught against our hard-fought collective bargaining dispensation.
The negotiations were held at the backdrop of a soaring crisis at the main center of global capitalism
and imperialism - the United States (US) and Europe, where there is massive shrinking of
manufacturing, and a shift into insecure services, especially finance, retail, security and so-called
"knowledge production" tertiary sectors. Despite the slowdown in the global economy, capital
continues to make huge profits by increasing the suffering of the working class.
In our own South African context, the negotiations took place amidst the ideological fog being
spread by the politicians of "a good story to tell", whilst our people, especially the working class and
the poor, are confronted with the crisis of poverty, unemployment and inequality.
This crisis is a result of the failures by the African National Congress (ANC)-led government to
radically transform the ownership and control patterns of the South African economy, as expressed
in the Freedom Charter.
We have long maintained this position. Therefore it is not about flexing of political muscles to
undermine the new administration, as spokespersons of white monopoly capital are saying.
On a daily basis, we are being fed lies that the neoliberal National Development Plan (NDP) is a good
story vision, and that our country has become a better place to live since the negotiated settlement
of 1994. However we know that there has already been a failure to achieve Vision 2014, which was
presented to us in 2004.
Overall, the 20 years of democracy has been a disastrous to the working class of our country. It has
been 20 years of:
higher rates of racialised poverty and unemployment;
higher levels of inequality,
inferior education system;
collapsed public health-care;
dehumanizing living conditions;
In fact, this has been a bad story to tell for the majority of our people, and a good story to tell by
White monopoly capital, which has benefited immensely since the dawn of democracy. The past 20
years have been white monopoly capitalist democracy.
Most of our members organised in this sector live in shacks and informal settlements, their wages
are insufficient to afford decent housing and other important basic necessities.
The bosses use the squalid conditions of our members as the basis to refuse them decent wages in
order for them to afford a decent life. The bosses are only interested in extracting huge profits from
our labour and exporting them to the capitalist centers in London, Germany, New York and Sandton.
57 | P a g e
Our lowest paid members, those who work in gate and fencing and contract workers for capital built
projects such as Medupi and Kusile earn a paltry R3050 per month while it is common cause that
these contracting companies are reaping millions of rands from their contracts with Eskom. The 15%
increase we are demanding will only improve their salaries by R450 a month. How can this be
construed as an outrageous demand? General engineering scheduled employees earn poverty
wages of R5300 per month while the CEOs in this industry continue to earn millions.
We doubt that these overpaid representatives of the capitalist class spend less than R5300 on just
their cellphone costs for the month while workers are supposed to carve out an existence on this
pittance of a salary. Gary Bell, the CEO of Bell Equipment took home R3.1 million in 2011, nearly 50
times more than his own workers who he expects to be productive and enthusiastic on a daily basis.
Over 20% of workers' disposable income is spent on the cost of transport because of the persisting
legacy of apartheid social engineering, and its settlement patterns, which has ensured that Africans
in particular and Blacks in general, live far from workplaces.
The bargaining negotiations have spectacularly failed to produce the desired outcomes as expected
by the thousands of our members in the sector.
The employer bodies, particularly Steel and Engineering Industries Federation of South Africa
(SEIFSA), National Employers Association of South Africa (NEASA) and Boarder Industry Association
(BIA) are hell-bent on retaining and perpetuating the colonial apartheid wage income disparities.
The first phase of the negotiations took place on the week of March 26-27, 2014; the second phase
on the week of April 16, 2014; third phase on the week of May 8-9, 2014; fourth phase on the week
of May 21-23, 2014; fifth phase on week of May 28-29.
On May 30, 2014 we declared a dispute with the employer bodies under the auspices of Metal and
Engineering Bargaining Council (MEIBC).
We declared the dispute purely because we strongly believe that we have exhausted all possible
avenues for employers to concede to our demands, as mandated by our members.
We went to these Engineering and Metals sector wage negotiations guided by the following
principles, which underpinned our Collective Bargaining Strategy:
Closing the colonial apartheid wage gap, fighting for equity in the workplace and demanding
a Living Wage;
No to down variation to the worker's conditions of employment;
The democratization of the workplace;
Reduce excessive pay for the Bosses;
Developing the skills of the workforce that was deprived of that development during
colonial-apartheid past; AND
Use the collective bargaining to organise the unorganised and thereby growing Numsa into a
formidable fighting force.
58 | P a g e
We are currently busy consulting our members across the length and breadth of our country as part
of our "Ear to the Ground Campaign", to renew our mandates since the negotiations have reached a
dead-end.
It is quite evident that the employers are imposing a strike onto us; and the strike has never been on
our agenda, purely because our core demands are affordable.
But as a worker-controlled union, we will afford our members an opportunity to determine our next
course of action, as part of exploring other strategies to be applied to exert pressure on the bosses
to concede to our demands.
Drawing from our past experiences, a strike is inevitable.
We are fully aware of the huge burden the strike can have on our members, since the bourgeois
principle of No Work! No Pay will be applied by the bosses.
However, reading from the mood of our members, it is a sacrifice they are ready to make, conscious
of the fact that their united power can shake the bosses and halt production.
In the event the strike takes place, the following key sectors will be heavily affected, namely
foundries, electronics and telecommunications, plastic, fabrication industries, machinery and
equipment, automotive components sector, electrical engineering, basic metals, heavy and light
engineering, gate and fence, and construction engineering.
Major companies that will be affected include Scaw Metals, Bell Equipment, CBI, Union Carriage and
Wagon, Dorbyl, Marley Pipe Stystem and Dana Spicer Axle amongst others. Some of these
companies supply critical parts to the auto industry and could have a disastrous impact on their
already strained supply obligations. We currently have a crisis of security of supply of electricity and
if the strike commences, ongoing work at Medupi, Kusile and Ingqurha will be delayed. Employers in
the metals and engineering industry will have to take full responsibility for the repercussions this
strike will have on the economy as a result of their intransigence. Workers have nothing to offer to
themselves.
These are our core demands;
(1) 15% wage increase;
(2) 1 year bargaining agreement;
(3) Scrapping of Labour Brokers;
(4) Wage negotiations must benefit all workers irrespective of salaried or wage earners;
(5) Extension of the scope of the Main Agreement; AND
(5) Remove the short and layoff from the Main Agreement.
Our demands should be located and understood within the context of rising cost of living, excessive
executive pay and high inequality, grinding poverty and crisis of unemployment in our country.
59 | P a g e
Once again, Eskom is offering workers a pathetic 4.3% increase in salaries, far below the inflation
rate and which therefore translates into a wage cut. This takes place at a time when Eskom is
requesting R500 million for renovations at their head office. The former CEO of Eskom took home
R8.64 million last year while the total remuneration to directors last year amounted to over R52
million.
This is daylight robbery of state resources that should be directed to ensuring security of supply and
offering workers a living wage. Numsa is finally ready to take to the streets and withdraw its labour
at an unprecedented level, we will not be held hostage by essential service designations and the
union will not be responsible for any consequences that arise from workers being forced to strike.
Lastly, the National Union of Metalworkers of South Africa sends our militant solidarity to the
courageous workers who are currently on strike on the Platinum Belt. Their ongoing battle exposes
the fact that the South African working class rejects the continued super exploitation of black and
African labour. Metalworkers join the voices of these workers in demanding the end of colonial wage
patterns. Numsa calls on the employers in the platinum mining industry to meet the demands of
these workers.
We call on all employers in the industry to use this period between now and 30 June to come to the
table and make an offer that meets the fair and just demands of our members failing which we will
strike as our last resort.
Recommended