ArcelorMittal South Africa has decried the government's lack of support for steel exports and failure to act in pre emptive strikes to maintain production capacity.
Noting that the local steel market was limited, Ms Nonkululeko Nyembezi Heita CEO of ArcelorMittal SA said that the South African government was too slow in its response to the industry's needs in times of international crisis, such as the economic recession of the last two years.
She said that Brazil had swiftly taken action to ensure that local production was protected by raising import tariffs during the global recession to 30%. She argued that the government's announced export support for Ipap ZAR 3.6 billion over three years was an insignificant amount as it would cover 12 industrial sectors.
She added that "We are talking about 12 sectors across the economy, one can't short change yourself."
She agreed with University of Johannesburg economics professor Dr Fiona Tregenna, who warned MPs earlier that when a country eroded its industrial base you do not get it back. She added that "The Brazilian government got the steel producers together within weeks of the economic crisis."
She told the committee that "It worries me that we are not prepared to do what is necessary. The country needs to move at greater speed to shore up its industrial base."
She said that the steel industry had for two decades played a supportive role by equalizing input prices so that the price that local manufacturers get as a domestic producer equals what you would get in the export market. She added that "We set up a rebate system administered by the mills themselves. ArcelorMittal SA administers the rebate and pays the differential price."