South African steel sector requires investment, increased local procurement
The global spread of Covid-19 has locked the local steel industry in a chokehold, further weakening the already distressed manufacturing sector, says steel manufacturing company Veer Steel Mills business strategy and projects manager Neil Reddy.
“The synergy is such that the steel industry will rise to the occasion in supply, once we buy local,” he states.
“In many lines of goods, we find that most goods are 100% imports. This is a market gap South Africans must identify, acknowledge and compete against or with,” he states.
Reddy acknowledges that the government has been active in strengthening the manufacture of raw prime finished goods. He highlights five years of work already undertaken by the Department of Trade, Industry and Competition (DTIC) as evidence of this.
He notes that the DTIC’s actions have started yielding results in respect of reducing imports that compete with locally produced goods.
However, he says the country is still faced with gaps in the manufacturing sector owing to a lack in investment. This, he notes, has led to many products needed being imported.
For the steel industry to be able to make viable investment decisions, Reddy says, the need to produce products domestically and to buy domestically produced goods has to be promoted.
“At this juncture, it must be said that there is entrepreneurial activity, but its pace is far too slow to address economic change beyond gross domestic product and inflation,” he notes.
He adds that South Africa's membership of the Brazil, Russia, India, China and South Africa grouping should help to bring in international skill sets to raise activity and help drive local industrialisation.
“We look forward to more bold procurement policy that will promote local product,” Reddy avers.
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