Patel: Metalworkers industry facing biggest challenge yet

Minister of economic development, Ebrahim Patel. (Photo: Loanna Hoffmann)
Minister of economic development, Ebrahim Patel. (Photo: Loanna Hoffmann)

Cape Town - The metalworkers industry is facing its biggest challenge in living memory amid a global steel glut and over-production, said Minister of Economic Development Ebrahim Patel on Tuesday.

He was the main speaker on the second day of the National Union of Metalworkers South Africa’s (Numsa) 10th annual congress held in Cape Town when he told delegates that a “fourth industrial revolution” was emerging which could put a large number of metalworkers out of jobs.
“There are going to be major changes in the economy where robots will replace manual labour,” Patel said.
Today, a robot can read a newspaper, or pick up a glass of water. Roads in the United States (US) are already having driverless cars, he said.
Patel asked delegates to be mindful that the model of production and manufacturing is changing. “But don’t be like the first workers in history who tried to smash the machines that had taken their place.
“We can’t do that. But we can shape the technology and the society in which this technology is advancing.”
Interventions in the steel industry
Patel named a number of initiatives that government is driving to salvage the ailing steel sector.
“The metal sector is the bedrock of industrialisation,” Patel said, “and we can’t step away from it.”
For that reason, the Competition Tribunal slapped ArcelorMittal with a R1.5bn fine for collusion and cartel behaviour. In addition, Patel said, ArcelorMittal’s earnings before interest and tax may not exceed 10%.
He also cited the Industrial Development Corporation’s investment in the metal value chain as evidence of government’s commitment to the metal industry.
In addition, government has increased the tariffs of 31 categories of imported goods in the metal sector, such as wheelbarrows, TV antennas, steel pipes and bars and many other products, Patel said.
The growth in South Africa’s car manufacturing sector has led to exports of cars, trucks and buses to the value of R26bn, while government has also directed renewable energy producers to make use of metal components that are manufactured in South Africa.  
Not all good news
Patel said, although he is proud of government’s interventions, not all of government’s efforts have been equally successful or without challenges.
“Highveld Steel received a R150m loan from IDC and efforts to find a new buyer have been unsuccessful with the result that it had to close its operations, although we are involved in other discussions to reopen one section,” Patel said.
Another challenge is that the tariff protection provided to the basic steel manufacturers in the upstream industry, it increases the price that factories must pay if they buy that steel. “This in turn pushes up their prices and makes them less competitive, which again puts pressure on jobs.”
Patel, however, emphasised that without government’s efforts South Africa’s metal industries would have been crippled.

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