| As Africa’s largest steel
manufacturer, the
company can produce up
to 7.8 million tonnes of
liquid steel per annum. It
supplies over 60% of the
steel utilised in South
Africa and exports
significant amounts of
steel in sub-Saharan
Africa and elsewhere.
Founded in 1929 as a
state-owned enterprise
and privatised in 1989, the
company is part of the
global ArcelorMittal
Group, which is the
world’s leading integrated
steel and mining
company, with a presence
in more than 60 countries.
Our steel manufacturing
and associated coke and
chemical plants are based
in Newcastle, Pretoria,
Saldanha, Vanderbijlpark
and Vereeniging.
The company directly
employs 9 808 people
and supports thousands
more contractor jobs
through outsourced and
specialised functions.
We are committed to
producing safe,
sustainable steel and take
pride in our role as an
important pillar and major
driver of the South African
economy.
Our business
ArcelorMittal South Africa is an integrated
steel producer. Our steel is produced in
flat and long products that are suitable
for further conversion by downstream
manufacturers for use in the construction,
automotive, packaging and appliance
industries. We are continuously exploring
opportunities to widen this core range to
include more advanced or value-added
steel products.
Steel manufacturing is complemented
by a coke and chemical operation that
produces commercial coke for use by
the ferro-alloy industry and processes
by-products resulting from the steel
manufacturing process.
We are extending our interest in mines
that supply iron ore and coking coal, to
reduce costs and improve efficiencies
through vertical integration of our
sources of raw materials.
The key challenges facing our
business in 2012
The company faces a number of
challenges, both from the external
environment in which it operates and
from internal operations.
In 2012, a key challenge is the need to
update our mostly ageing plant – the
relatively modern Saldanha Works
excepted – to comply with new
environmental legislation. The cost of the
necessary upgrading is high, and we will
need to manage the capital we expend on
environmental compliance to remain
affordable within the reduced profitability
of the current economic reality.
We need also to remain profitable and
sustainable in the face of input costs such
as raw materials, energy and labour, which
are rising faster than the price of steel.
We are taking steps to mitigate the
impact of increasing raw material and
energy prices, but these solutions will
mostly take several years to implement.
Much effort has gone into resolving the
logistical problem of the transport of raw
materials and finished products in recent
years, and we anticipate a smoother and
more cost-effective supply chain in 2012.
Government has questioned our pricing
model, as steel is a major component of
its developmental strategy, but we are
confident that a realistic solution will be
found.
Historically, the South African Rand is one
of the most volatile currencies in the
world and the results of its movements
against other major currencies can only be
mitigated to a certain extent. The Rand
was relatively strong against the US Dollar
for most of 2011 and is expected to
remain so during 2012.
Within the company, we were severely
tested in 2011 by operational failures at
the Newcastle and Vanderbijlpark Works
and the planned stoppage at Saldanha
Works, which reduced steel output. The
business improvement programme
launched in 2010 is aimed at eliminating
or minimising these outages, with much
progress already made in 2011. The
Saldanha Works was the first to complete
its plant stabilisation process, with the
others well on track.
In a country that is desperately short of
the skills that we have in our workforce,
retaining vital skills is a constant challenge.
We are addressing this issue by revamping
the rewards we offer to loyal employees,
while operating a sophisticated skills
development pipeline that streams
suitably equipped new employees into
our workforce. |
