ArcelorMittal S.Africa says ready to cap profits if cheap imports taxed
20 August 2015
ArcelorMittal South Africa is willing to cap its profit margin if the government imposes duties of up to 10 percent on imported steel, Chief Executive Paul O'Flaherty told Reuters on Wednesday.
Cheap imports from China are hurting South Africa's steelmakers with Evraz Highveld Steel and Vanadium in business rescue proceedings and ArcelorMittal warning it could close a plant that employs 1,200 people.
"We have to make a decision on Vereeniging by the end of August," O'Flaherty said about the plant.
The company has often been criticised by South Africa's government for not charging a "competitive price" for steel that would benefit downstream industry and create jobs.
But a global supply glut has hit the steelmaker's sales, increased its losses and now threatens as many as 200,000 jobs in the manufacturing sector, O'Flaherty said.
He said South Africa was the only country in the world that has a primary steel industry but has no tariff on steel imports.
"We need an import tariff at the 10 percent-bound rate as has been agreed with the World Trade Organisation," said O'Flaherty.
ArcelorMittal has also applied to South Africa's trade administration commission to slap anti-dumping taxes on Chinese imports on top of the 10 percent duty.
O'Flaherty declined to say what profit margin ArcelorMittal was willing to accept but said it would not be more than what South African antitrust authorities have deemed a "fair return" in recent cases.
Jobs are being shed across the industry, with Evraz Highveld Steel and Vanadium saying it would cut about 1,000 and the state-controlled Scaw Metals Group, could cut up to 1,000 jobs at several of its plants.