state of the stainless steel nation
2. Shift to Service-Based Economy: An increase in the proportion of jobs and economic output in the service sector. This seems like the logical result of disappearing jobs in the manufacturing sector and this shift is also measurable in South Africa. 3. Closure of Industrial Facilities: The shutdown or relocation of manufacturing plants and facilities. In the case of AMSA, this is exactly what is taking place and has started a number of years ago with the “mothballing” of the Saldanha plant. 4. Loss of Industrial Capacity: A reduction in the ability to produce goods domestically. Many of our white goods were previously manufactured within the country but this position has reversed over the last two decades and is also illustrated very well by the lack of stainless steel finished goods still made in South Africa. Twenty years ago, South Africa still had the ability and capacity to manufacture more than 80% of local demand. This is no longer the case with the hollowware industry teetering on the edge of ruin for many years. The loss of capacity also implies the loss of skills. These skilled people now emigrate and become the competitor of our own industry. The origins of de-industrialisation The usual causes of de-industrialisation would be issues such as globalisation where products are now procured from countries with more competitive strategies. This
would be acceptable since honest competition can make one’s own industry stronger and more competitive. However, local producers in South Africa need to contend with policies that include dumping and other unethical trade mechanisms. Another reason for de-industrialisation could be technology which might give competitors an edge. It is sad to realise that investment in upgrading local technology to a competitive level will be slow and reluctant (even for local financiers) due to low levels of economic growth, crime and legislative and structural issues. In the world of stainless steel, we do not see that consumer trends influence stainless steel demand. The product is used for specific reasons that only stainless steel can satisfy. However, government policies still do not stimulate and encourage domestic manufacturing. This is clear from government’s inability to solve the de-industrialisation issue, with AMSA being the immediate casualty of regulatory and policy failures at many levels. A looming crisis or a chance for renewal? The outcomes of de-industrialisation for the South African economy are already painfully visible when we look at the levels of unemployment and financial inequality in society. The closure of AMSA will have a strong economic impact in a region that cannot afford it. Another example is how South African international policies are now threatening future participation in AGOA. This would be a total calamity for the auto industry and industries such as mining and agriculture. The South African economy and consumers will be forced to rely more heavily on imports.
6
Issue 1 – 2025
Made with FlippingBook - professional solution for displaying marketing and sales documents online