Page 71 of 91 ANNEXURE G: IMPORT REPLACEMENT Information from SAISI 1. Opportunities exist for South African industry to replace imports along the steel value chain. This initiative must be driven by one or more senior champions. 2. Initial estimates are that about 200 000 tons (and possibly up to 500 000 tons) of imported final products could be replaced, generating about 800 direct jobs and adding about R7bn per year to GDP. Capacity and expertise exists for much of this. Much of the existing capacity was built with continuous growth in mind. The decrease in demand has led to over-capacity in many sectors. 3. These investments will be sustainable only if the industry can also export at scale into the rest of Africa. 4. Some level of protection will be required to assist the industry in the initial stages, but that should be granted only where there is a commitment by industry to increase their competitiveness, so as not to raise other costs in the economy significantly through import replacement. 5. The required commitments are set out below. 6. The industry associations in each sector (wire, fasteners, stainless steel etc.) are being requested to propose what industry will do to replace imports cost-effectively and what is required from government, labour and other stakeholders. They will consult with the full supply chain in each case, from the product down to the steel supplier. 7. They will be urged to make a preliminary report to the DTIC and the IDC within three months, setting out what is possible and what commitments are required from business, labour and government. 8. Detailed business cases can then be constructed by interested firms and associations. Annexure G IMPORT REPLACEMENT
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The South African Steel and Metal Fabrication Master Plan 1.0
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