MACSTEEL chief executive Mike Benfield said the out-of-court settlement reached with the Department of Trade Industry and Competition (Dtic) last week would level the playing field for the downstream steel industry.
Benfield said Macsteel , South Africa’s largest steel merchant, had settled out of court after the Dtic on Monday, a day before the court hearing was scheduled, offered to suspend the safeguard duty on hot-rolled coil products for a period two years.
“We decided to take the offer and as a result we settled on the court’s steps, so to speak. The key component for us is that when safeguards come to an end, the Minister and the International Trade Commission (Itact) cannot institute a safeguard for a particular product again for the next two years. The industry will enjoy a holiday from safeguard duties on hot-rolled coil for two years,” said Benfield.
Three years ago, Itac introduced a safeguard duty to cushion South Africa’s primary steel producer ArcelorMittal South Africa (Amsa) from the influx of cheap imports mainly from China. Macsteel approached the court last August after the duty was extended for another year on the basis that the extension was illegal.
“Our major objective in doing this was to ensure that we establish a far more level playing field in respect of how duties are looked at and deployed in this country in terms of the steel sector. We need our customers and the downstream industry to have far more choice when it comes to sourcing and procuring steel and ensure that ArcelorMittal South Africa (Amsa) is competitive in terms of pricing,” said Benfield.
Benfield said receiving its duties back from the South African Revenue Service (Sars) had been a secondary aim of the legal battle.
“Our application was not without its risks. Even if the court found in our favour they may have determined that in the public interest Sars need not reimburse the duties for whatever reason,” said Benfield.
Dtic spokesperson Sidwell Medupe said the settlement was as a result of the proposal from the department after consideration of the balance of factors.
“An amicable solution arising from this settlement is in the best interest of all parties, without prejudice to any party. Trade instruments are administered through the ITA Act and decisions thereof are made in line with the applicable legislative provisions and WTO rules,” said Medupe.
Dtic, industry and labour launched the Steel Master Plan that has committed all social partners to find a balanced approach and equitable policy framework to enhance supply and competitiveness in the value chain. “We indeed commit to closely working with all social partners in this regard,” Medupe said.
Benfield said that Macsteel was committed to the plan’s outcomes.
“Am I completely comfortable with the way the Steel Master Plan was written? No, I think it lacks concrete plans and timelines and is more of a philosophical document,” said Benfield, adding that the plan created a platform from which the industry can work to solve its problems.
Benfield said the steel sector had been underperforming for many years and many jobs had been lost.
“We need to re-energise the sector. It is off the back of demand-driven initiatives that we will create more consumption in South Africa ... The rescue plan for steel should be far more demand driven than supply driven. What AMSA has enjoyed is the supply side protection which does not talk to demand. We need to create positive sentiment in this country,” said Benfield. | dineo.faku@inl.co.za
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