Addressing media on Monday, 31 May 2021, ArcelorMittal South Africa’s CEO Kobus Verster, answered several questions regarding the future of the steel giant, its employment security and how the business fared against Asian markets as well as its future safety plans.
Coming out of 2020, Verster highlights that ArcelorMittal SA is a very different company from what it was three years ago, especially when looking at how the company has undertaken a serious business transformation in order to adjust to the ever-evolving steel market.
Considering this, with the exception of Saldanha Works, the CEO points out that two of the three company’s blast furnaces are now operational. However, despite operations bouncing back from the past year, seeing the steel giant slowly recovering, he notes that ArcelorMittal is currently experiencing backlogs in meeting its clientele’s demands.
The backlog is currently sitting at six weeks, with the norm being two weeks. This, Verster states, is an issue but not out of the ordinary and can be resolved timeously. One of the contributing factors of the backlogs is the depletion of steel supply throughout the county, which began in 2019. Additionally, the price of steel has also increased, with some countries seeing the costs tripling. Furthermore, Verster says that some of their products could not be moved due to customers not having the necessary credit and funding.
Moreover, he points out that ArcelorMittal South Africa has saved approximately R3.6 billion in fixed costs by addressing issues, looking at business transformation, and adjusting to the current economic climate.
Discussing the longevity and stability of the Newcastle branch, the CEO stated, Newcastle’s plant is in a much healthier condition than it was two to three years ago in terms of finance. “ArcelorMittal Newcastle is currently running at a capacity of 63%, which is the minimum it can do.”
Highlighting, due to the vast improvement in the Newcastle branch and its competitiveness, further growth and development are on the cards.
In regards to imported steel products, he notes there are difficulties in the international supply chain, however stating, “There is a demand for domestic steel products.” With this in mind, he assures Newcastillians that when it comes to the Asian steel market, ArcelorMittal South Africa is proving to be a competitive force. This is despite facing challenges such as exceptionally high rail tariffs and an inefficient rail system.
During the course of 2020, ArcelorMittal SA lost numerous employees as a result of workplace accidents. But, Verster says when looking at the incidents from a safety performance perspective, the company does exceptionally well. But to deter similar incidents in the future, the steel giant is now working with companies from Brazil, bringing about a cultural shift in how locals view safety. In addition, the company is also looking at steps in becoming more environmentally friendly through various technologies.
With ArcelorMittal South Africa looking at recuperating from its slump, the CEO concluded with, “We are working closely with our customers.” This he stresses is to ensure issues can be addressed, and as he points out, “2020 has highlighted the importance of collaboration and working together.”
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