https://www.engineeringnews.co.za

Are South African companies dying or perishing?

16th June 2017

By: Riaan de Lange

     

Font size: - +

This is a simple enough question, but is the answer as simple? Well, that depends on the distinction you make between dying and perishing. According to the Oxford Dictionary, perishing is defined as dying, especially in a violent way, and dying is defined simply as being on the point (verge) of death.

So, are South African industries really perishing or simply on the verge of death?

This reminds me of the 1968 Peter Sellers movie. Or is it a Blake Edwards movie? The movie in question is not The Pink Panther, but The Party. The movie opens shortly after the MGM lion roars, with clear blue skies as a group of British soldiers – a Scottish regiment, as is evident from their dress and a group playing their bagpipes – march through a rocky gorge. From the rocky elevations, awaiting them and hidden from their sight is a band of Indian insurgents, among whom is a horn blower. The camera zooms on the horn blower, who is about to signal to the insurgents to open fire, which he duly does and is subsequently shot. However, our hero, undeterred by his wounds, which should have killed any other mortal, rises up and continues to wail through his horn, attracting more gunfire. He does not flee and returns to his position numerous times, to the great frustration of all involved in the conflict. Eventually, even the insurgents start shooting at their own horn blower just to silence him, in the process destroying what one now realises to be the opening sequence of a Hollywood epic movie being filmed.

In a way, this is reminiscent of South African companies, particularly those in the poultry (read chicken) and iron and steel industries. For how long have you been reading of their imminent demise? On January 18, free-to-air television channel eNCA ran a story headlined ‘SA’s poultry industry on the verge of collapse’, while, on March 3, a story headlined ‘Poultry industry in crisis’ appeared on the BusinessLive website. And on August 31, 2016, Global Meat News published a story highlighting the challenges facing the local poultry industry under the headline ‘Crisis point for South African poultry industry’. The industry’s challenges date back to 1999, when antidumping duties were first imposed against the US. A safeguard duty of 13.9% against the European Union is currently in place and will remain in force until July 3.

As for iron and steel, stories highlighting the challenges that the industry faces have appeared under the following headlines: ‘SA’s steel industry on brink of collapse’ (Mail and Guardian, April 8) and ‘SA steel industry in crisis’ (eNCA, July 10, 2015). This is another industry that has benefited from antidumping duties.

It would seem that, like the horn blower, these industries tend to survive, no matter the extent of their injuries. How can this be? Is it that their injuries are not material? Are their injuries self-inflicted and, as a consequence, they are able to redress these on their own through business improvements? Or could it be that they are simply crying wolf? Or is the reason for their continued survival simply inexplicable?

In the article published in this column on May 13, 2016, titled ‘The industry of steel – to reboot or to boot?’ I wrote about the protective measures sought by the industry in the context of the foreign ownership of the companies comprising this industry.

Then there was the article published on July 1, 2016 – nearly a year ago – titled ‘Localised metal fatigue: we’ve been having it’, in which I wrote about a notice from Economic Development Minister Ebrahim Patel, which had been published in the Government Gazette of June 10, 2016. The notice informed of the establishment of a committee of the International Trade Administration Commission of South Africa (Itac) to monitor (and make recommendations to Itac) the impact of changes in import tariffs (also known as duties) applicable to the primary steel industry on downstream users in the steel industry; the pricing of the products of companies in the primary steel industry to downstream users and the steel industry, generally. This would include the commitments made by applicants for such changes in import tariffs and their impact on job creation and job retention; industrial output; investments in plant, equipment and skills; research, development, technology and economic investments; jobs in the full steel industry value chain; and import and export trends in the steel industry value chain.

The committee was established for a period of five years from June 10, 2016, and comprises 14 members referred to as either Itac commissioners or additional persons appointed for a period of 12 months. The ‘additional persons’ are representatives of the South African Iron and Steel Institute; the Southern African Institute of Steel Construction, the National Employers Association of South Africa, the Steel and Engineering Industries Federation of Southern Africa (Seifsa), International Steel Fabricators, ArcelorMittal South Africa and the South African Coil Coaters Association. (Two Seifsa representatives serve on the committee, one as a commissioner and the other as an additional person.)

So, here we are, nearly a year later (well, by the time you read this column, it would have been more than a year). Is there any news about this committee or its activities?

The only constant remaining, I would contend, is that the South African chicken and steel industries are reminiscent of The Party’s horn blower. Well, depending on whose party it is. This is reminiscent of the lyrics delivered by artist Lesley Gore, which might resonate with you: “It’s my party, and I’ll cry if I want to, Cry if I want to, cry if I want to, You would cry too if it happened to you.”

South Africa’s chicken and steel industries might not be either dying or perishing, though they might well be terminal, but how imminent is their demise? Well, that, no doubt, depends on your view of the length of the string still remaining. But rest assured, you are bound to hear their wailing horn until the curtain finally calls.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

Showroom

Yale Lifting Solutions
Yale Lifting Solutions

Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...

VISIT SHOWROOM 
AutoX
AutoX

We are dedicated to business excellence and innovation.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 19 April 2024
Magazine round up | 19 April 2024
19th April 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.117 0.172s - 139pq - 2rq
Subscribe Now