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BusinessLive reports that Arcelor Mittal SA (Amsa), which has already cut 1,000 jobs, plans to shed hundreds more as it battles low steel demand and rising costs.
Africa’s largest steelmaker could retrench 400 employees from its Newcastle operations in KwaZulu-Natal, CEO Kobus Verster said on Thursday. Amsa has been struggling with weak demand and rising electricity, rail and port prices. In 2019, it announced a review of its assets to cut the costs. This led to the winding down of the Saldanha operations in the Western Cape, which will be completed by the end of the first quarter of 2020. On 24 January, the company, after its annual revenue fell 9% to R41.35bn due to lower sales volumes, commenced with section 189 consultations that might result in the retrenchment of 400 employees at its Newcastle plant. But, speaking after the release of results for the year ended 31 December, Verster said the company had decided not to close the Newcastle plant. “When we looked at the closure of Newcastle, we came to the conclusion that the impact of that would be substantial on the domestic market. Financially, you could say — shut it down. But there is still a cost problem,” he commented. Verster confirmed that primary steelmaking operations at the Newcastle plant would continue, with output from the plant to service the domestic and Africa markets. “The cost base of the business does not really justify exports (to overseas markets) in these market conditions. We are far from most export markets and our focus is mainly East Africa. So we are not focusing on exports,” Verster said.
- Read the full original of the report in the above regard by Siseko Njobeni at BusinessLive
- Read too, ArcelorMittal SA does U-turn for ‘social’ reasons on closure of Newcastle operations, at Moneyweb
Get other news reports at the SA Labour News home page