1.4.2 Increasing productivity, reliability and professionalism are essential for the industry to succeed and survive. The maintenance of jobs and of a living wage depend on increasing productivity and reliability for delivery and quality. This will require the unions to lead a culture change in both labour and management, with a special focus on the role and training of junior and middle management. Continuous skill upgrading is essential. NUMSA in particular has worked with its fellow unions in Europe on the Learning Factory model and should lead this programme. 1.5 Carbon Tax: A Carbon Tax has been announced which would inter alia apply to the local steel industry. Concerns have been expressed by industry that the tax in its current form would in effect be a penalty against local production, and thus to level the playing field, the tax should be applied in equal measure to imported products. It is accordingly proposed that consideration be given to applying the carbon tax fully to imports, which would require further consultation with the National Treasury, which has indicated that it is open to discussions with the industry on the implementation of the carbon tax. Treasury states that “The carbon tax design includes additional allowances for businesses that are trade exposed to mitigate the impact of the tax on their global competitiveness. However, National Treasury would be willing to engage on the potential for carbon border adjustments (which is being investigated by the EU - https://ec.europa.eu/ info/law/better-regulation/have-your-say/initiatives/12228-Carbon-Border-Adjustment-Mechanism.)” 2. ESTABLISHING INDUSTRY AND PRODUCT STANDARDS 2.1 The SA Bureau of Standards is a very important institution for the success and competitiveness of the steel industry. The setting of standards is crucial to the protection, development and success of the local industry. The international reputation of an SABS certification has been important for exports. The setting of standards guides local industry development and investment. Standards are also a key factor to assist localization. The National Regulator for Compulsory Specifications plays a crucial role in preventing sub-standard products from being imported or sold in South Africa. Both institutions are currently in urgent need of further capacitation, which is critical for the industry. The SABS has lost engineering and technical staff. The loss of technical capacity impacts on its ability to provide a national service and on its international reputation (and therefore its value for export promotion). A new leadership will be expected to restore the technical and engineering capability and improve the capacity of the SABS and the NRCS and the international reputation of the SABS as a matter of urgency. The industry must assist the SABS and the NRCS to restore capacity. The SABS has undertaken to implement a service to monitor localization. The industry should lead the assistance to the SABS. 2.2 Product safety: the import and sale of very thin galvanized sheeting for roofing and cladding (mainly for informal housing) is dangerous to the users and is harming the industry. It will be necessary to have a SABS standard confirmed and put a compulsory specification in place. It is reported that very thin sheeting is sold mainly in the rural areas and small towns, often by dealers who sometimes do not pay VAT or corporate tax. The large retailers have undertaken not to carry the thin sheeting, with one exception, where the company says it has to carry the thin sheet in its small town outlets but has in-store information to inform customers of the need to rather buy quality sheeting. Other avenues to prevent the sale of the dangerous, sub-standard sheeting are being investigated. 2.3 Induction furnaces have technical limitations. For them to supply high quality steel, they must select high- quality scrap as input material. Some of the mini-mills are now upgrading to electric arc furnaces and ladle refining furnaces, which can produce higher value-added products. The question of appropriate standards applicable to the use of steel products in construction and other downstream sectors has been raised and needs to be properly investigated by regulators, without introducing disguised barriers to entry. Induction furnaces can only produce a limited range of products (excluding for instance certain wire bars, spring steel, high-rise sections and rebar). It is essential that this be taken into account when considering the appropriate investment balance. The SABS is critical to produce standards which clarify what the products of induction furnaces, arc furnaces and blast furnaces can be used for, especially in construction.
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The South African Steel and Metal Fabrication Master Plan 1.0
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