Sassda lobbies for the re-opening of the stainless steel industry

A hallmark of the ‘Age of COVID-19’ is the speed of a rapidly evolving business scenario with companies and associations having to re-evaluate and respond on an almost daily basis made all the more complicated by an onslaught of multiple moving targets.

One of the best examples of how Sassda has revved up its response to the COVID-19 outbreak was our comprehensive submission to the Department of Trade, Industry & Competition by the incredibly tight deadline of 12pm on Monday, 27 April 2020! This covered how the South African stainless steel sector can safely re-open when the country moves to Level 4 of the current COVID-19 lockdown on Friday, 1 May 2020.

Our submission stressed that it was important to differentiate between the readiness for re-opening of industry at the different levels of the value chain such as primary producer, distributor, and fabricator. It is also true that a segmented re-opening in the stainless steel industry will not be feasible as the one level is co-depended on the others in our value chain.

Why us?
We pointed out that it was critical to note that the stainless steel sub sector of the metals industry had key differentiators to the general metals industry. This stems from the fact that stainless steel is resistant to corrosion and contamination and is therefore a specified material in several essential service industries including medical equipment, food & agri processing, pharmaceutical manufacture, water treatment, power stations, chemical manufacture, petroleum refineries, and pulp and paper manufacture.
A key point was that most of these industries cannot operate for any length of time without access to the stainless steel equipment and materials necessary to their processes.
We framed our response in terms of the governments risk adjusted strategy for economic activity and outlined a number of key reasons for a return to activity including:

  • Sectorial contribution to GDP – The stainless steel value chain covers both the manufacturing and wholesale sectors. These combined contribute 19% of GDP
  • Employment – The manufacturing and wholesale sectors contribute 18.2% of employment
  • Export earnings – South Africa’s primary stainless steel producer exports between 70% – 75% of its production. Manufactured goods and components represent between 25% – 35% exports.
  • Is it an enabling industry – Many of the essential service industries are not able to operate for any length of time without access to stainless steel equipment, components, and raw materials. In addition, many other industries such as sectors of construction, mineral processing, waste disposal/management are reliant on stainless steel.

Overall it was made clear, that the impact of returning to work at Level 4 of the lockdown will be significant and will go a long way to ensuring the survival of our key enabling industry.
With an initial return of approximately 30% of the work force, the view was that a significant level of productive capacity can be achieved and we pointed out that most of the work force who will return are at the lower end of the salary scale and are most vulnerable to economic hardship.
We also took the opportunity to pledge our industry’s support towards the quick recovery of economy in a manner that will balance the health concerns with that of industry to the benefit of all South Africans.