Production: South Africa was ranked the 21st largest steel producer by the World Steel Association and produced 7.2 million tonnes of crude steel in 2014, accounting for 0.4% of global production. ArcelorMittal SA is the largest steel manufacturer on the continent and as the only company operating blast furnaces in South Africa, it is responsible for the majority of basic iron production, as well as supplying 80% of local flat steel requirements and 52% of the local long steel products.
Challenging conditions: Trading conditions have been challenging and made worse by stiff competition from Asian producers. More than 600,000 tons of steel was imported into South Africa from China during 2014 and was sold at least R500/ton cheaper than local steel. Lack of protection from cheap imports and reduced cost-effectiveness because of low capacity-utilisation make it difficult for South African companies to compete internationally. Increasing electricity prices and concerns over stable supply from Eskom, recently downgraded to “junk” status by ratings agency Standard & Poor, also threaten the success of local iron and steel product manufacturers.
Eyeing the rest of Africa: Despite the difficulties of local manufacture, South Africa is seen as a lucrative market for international companies because of the potential for growth in the rest of Africa. Regional GDP growth of 5.2% in 2015 and 2016 and the focus on the development of mining and infrastructure are predicted to create a strong demand for steel.
Report coverage: The Manufacture of Iron & Steel in South Africa evaluates the domestic industry, government attempts to stimulate local manufacture and factors influencing the sector’s success. The report also profiles 25 industry players, ranging from the local arm of multi-national ArcelorMittal to small enterprise NJR Steel Holdings (Pty) Ltd, which employs 14 people in the manufacture of sheet and plates and hot rolled flat products.
Table Of Contents
Manufacture of Iron and Steel in South Africa 2015 1. INTRODUCTION 1 2. DESCRIPTION OF THE INDUSTRY 1 2.1. Industry Supply Chain 2 2.2. Geographic Position 4 3. SIZE OF THE INDUSTRY 6 4. STATE OF THE INDUSTRY 9 4.1. Local 9 4.1.1. Corporate Actions 13 4.1.2. Regulations 13 4.1.3. Enterprise Development and Social Economic Development 15 4.2. Continental 16 4.3. International 17 5. INFLUENCING FACTORS 19 5.1. Government Intervention 19 5.2. Economic Environment 23 5.3. Lack of import protection 23 5.4. Power Supply Issues 24 5.5. Input Costs 24 5.6. Cyclicality 25 5.7. Labour 27 5.8. Information Technology 29 5.9. Environmental Concerns 29 6. COMPETITION 30 6.1. Barriers to Entry 31 6.2. Innovation and RandD 31 7. SWOT ANALYSIS 32 8. OUTLOOK 33 9. INDUSTRY ASSOCIATIONS 33 10. REFERENCES 34 10.1. Publications 34 10.2. Websites 34 ORGANOGRAM 35 COMPANY PROFILES 37 AFRICA PIPE INDUSTRIES (PTY) LTD 37 ARCELORMITTAL SOUTH AFRICA LTD 39 ARGENT INDUSTRIAL LTD 45 ARGENT STEEL GROUP (PTY) LTD 49 AVENG TRIDENT STEEL (PTY) LTD 51 BARNES TUBING INDUSTRIES (PTY) LTD 55 BOSAL AFRIKA (PTY) LTD 57 CAPE GATE (PTY) LTD 59 COLUMBUS STAINLESS (PTY) LTD 61 DUFERCO STEEL PROCESSING (PTY) LTD 64 EVRAZ HIGHVELD STEEL and VANADIUM LTD 66 FISCHER SOUTH AFRICA FACILITIES (PTY) LTD 70 GARSIN ENGINEERING CC 72 GROUP FIVE PIPE JOINT VENTURE 74 HALL LONGMORE (PTY) LTD 76 INNOVATIVE MINING PRODUCTS (PTY) LTD 78 INSIMBI REFRACTORY and ALLOY SUPPLIES LTD 80 JAGUAR METALS (PTY) LTD 83 MACSTEEL SERVICE CENTRES SA (PTY) LTD 85 NEVEN MATTHEWS (PTY) LTD 92 NJR STEEL HOLDINGS (PTY) LTD 94 PRO ROOF STEEL MERCHANTS (VRN) (PTY) LTD 97 ROBOR (PTY) LTD 99 SALDANHA STEEL (PTY) LTD 103 SCAW SOUTH AFRICA (PTY) LTD 105