AMSA pulling the wool over government’s eyes with a 41 per cent steel duty protection application

In recent communication sent out by the National Employers Association of South Africa (Neasa), the association says AMSA is pulling the wool over government’s eyes. The following is the statement released:

“What follows is a letter by a Steel Industry business regarding AMSA’s application for a 41 per cent duty on steel products.”

“In a carefully worded application where AMSA use selective facts and omitting factual truths, they applied for a 41 per cent duty protection on certain steel products (galvanised coil, 0.45mm and thinner). Technical detail and unverified statistics paint a complicated picture of why this duty, on top of the 10 per cent that already exists, should be granted.”

“What is actually happening, is that AMSA is trying to exclude competition from abroad, on products that they don’t manufacture, or in respect of which they can only offer a much more expensive alternative.”

“Modern mills situated in China have embraced new technology to produce cost-effective raw material with which AMSA with its 60-year-old mill simply cannot compete. With regards to some specifications that are included in AMSA’s application, AMSA does not manufacture this particular product-range at all. These specifications are mentioned but the fact that they are unable to produce it, is not mentioned. In other cases where they also do not manufacture this particular product-range, they claim to have a similar product that fulfils the same function which they then call a ‘like product’. These ‘alternative products’ are way more expensive than its Chinese counterpart.”

“AMSA have recently spent millions of rands to convert one of their old mills to produce similar products to those that are (currently) being imported, but they only managed to reduce the input cost of the coating material by 40 per cent, which is still double that of the Chinese equivalent. AMSA now offer this product where they have reduced the coating cost with 40 per cent, in spite of the fact that in previous applications they described this product as ‘inferior’ and ‘dangerous’.”

“You might recall that there are still 9 new tariff codes outstanding with the Minister that have not been implemented. NEASA will, as in the past, and on behalf of those employers being affected, take legal action if these absurd duties and others that are still outstanding, are implemented.”

“It will, once again, be inconceivable if Government falls for AMSA’s latest ploy, since the advantage of new technology vs old technology cannot be disputed – the global steel industry advanced substantially where AMSA, instead, made the choice not to invest in South Africa and now call on Government to protect them from competition brought on by these technological advancements.”