Management upcycles giant steel plant to provide jobs and business space in new industrial park, writes Sizwe sama Yende.
Driving around the complex of what was the Evraz Highveld Steel and Vanadium plant in Mpumalanga gives one a spooky feeling.
“Never mind the rusty look,” said Andrew Maralack as he took City Press on a short tour around the plant.
Maralack is Highveld Industrial Park’s chief finance officer, a position he originally held at the defunct business.
“This place is alive and everything is working.”
The plant stands today because of the foresight of the Evraz Highveld Steel and Vanadium management.
Had they caved in after a business rescue plan failed to attract investors, its assets would have been scrapped.
Instead, they came up with a novel idea to turn the plant into an industrial park.
Now renamed the Highveld Industrial Park, the infrastructure of the 50-year-old steel and vanadium giant still stands strong on 400 hectares of land outside Emalahleni.
Although Evraz Highveld Steel and Vanadium faced its demise, delisted and retrenched its entire workforce of 1 800 in February 2015 after being submerged in debt exceeding R2 billion, the new industrial park is a beacon of hope that is creating much-needed jobs and providing skills to the community.
There are 21 businesses that are renting space in the plant and seven start-up business have been established.
A total of 758 people, 316 of whom were retrenched from Evraz Highveld Steel and Vanadium, are working in the business.
“The scrap metal guys would have a good day if this plant was scrapped,” said Maralack.
“The money invested here makes this place a national key point … scrapping it would be a major loss to South Africa with all the equipment, plants and factories on site,” he added.
Maralack said the management saw new opportunities and capitalised on what the old Evraz Highveld Steel and Vanadium already had.
He said the plant had the advantage of being self-reliant in terms of services since it had direct access to bulk water, obtained electricity directly from Eskom (it is the eighth largest electricity consumer in the country) and already had a gas supply from Sasol.
“We realised that we are situated in the middle of an industrial hub with mines, power stations and other industries. So we thought that we could service all the businesses around us if we let everybody come and set up their businesses here,” Maralack said.
These opportunities include:
- Operating a structural mill in partnership with steel manufacturing multinational ArcelorMittal, as well as a heavy-duty workshop for refurbishment of dragline buckets;
- Hosting an engineering training centre for welding, rigging, boilermaking, instrumentation, electricians, millwrights, fitting and turning;
- Using the existing rail infrastructure to import coal for junior mining companies; and
- Hosting a plumbing, bricklaying and computer skills centre, as well as a catering company.
The structural mill, which distinguishes itself as the only medium to heavy structural mill in Africa, manufactures rails, construction columns and beams.
“ArcelorMittal covers Highveld’s cost to run the mill on its behalf. We’re refurbishing it to the required engineering standards. They give us raw steel and we roll it here,” Maralack said.
He said that Transnet spends R300 billion a year to import rails and would now get them from the mill.
More than 300 trucks a day deliver coal that will be exported using the railway infrastructure.
“The railway infrastructure was previously used to bring coal to feed us. The stockpiles are now loaded into trains and exported. It benefits junior miners that don’t have this infrastructure,” Maralack said.
Maralack added that there were also 700 hectares of vacant land that could be used for an agricultural academy.
That land is already leased out to farmers.
Lime for agriculture, he said, was being extracted from the waste dumps that had piled up over the past 50 years.
“If this place was scrapped, the environmental legacy would be left to government,” said Maralack.
Mpumalanga Premier David Mabuza and his Cabinet visited the industrial park last week and he pledged his support.
“I spoke to Cabinet members about the industrial park and the tenants you have here; they were still theorising it, you have it and it is already working. We are therefore going to have a working relationship with the tenants who are here, and we will get more and more to come and work here,” Mabuza said.
Evraz Highveld Steel and Vanadium crumbled financially due to a combination of market and operational factors.
The market factors included slow economic growth and cheap imported Chinese products.
“When we tried to take out a lot of excesses in the first quarter of 2015, it was too late,” said Maralack, “and the shareholders only put in R380 million, and thereafter refused to do anything.”
An investor in Hong Kong promised to come on board, but could not provide guarantees worth more than R1 billion by January 2015.
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