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Motor Industry in South Africa upset by ArcelorMittal SA’s pronouncement

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by - 10/18/2012 7210 Views

Mittal to stop ISF steel production from December this year

 

Imported Surface Finish (ISF) steel is the major requiremment of the motor manufacturers. ArcelorMittal’s production unit in South Africa specializes in the production of ISF steel. The company unexpectedly announced that it would suspend its production of ISF steel from December.

ISF steel is mainly used in the outer panels of some vehicles.  ArcelorMittal at first announced that it would discontinue its production in June itself but later postponed to December said Mr. Stefan Haasbroek, the chairman of the original equipment manufacturers (OEM) purchasing council – a sub-committee of the National Association of Automobile Manufacturers of SA. He added that the committee has decided to take this issue to the notice of Trade and Industry Department as this would have drastic impact on the automotive industries in SA especially as the market is on the peak.

Although the steel prices are based on international basis, the cost to local original equipment manufacturers will increase as it has to pay for the logistics to import the product.  Mittal projected alternative sourcing of this material from Europe but OEM is on its adventure to explore best key for its own maneuver.

Total consumption of steel as of now by the Industry is approximately 9000 Tons in a year in which only 850 tons is ISF steel of the total utilization. But then ISF steel was preferred by some OEM’s due to its quality and cost considerations.

What made ArcelorMittal to cease the production?

Mittal’s orator, Mr. Themba Hlengani expressed that though the company announced that it would suspend its production in June, later they accommodated the motor Industry and pushed the decision to December. Low demand in South Africa for ISF steel and most importantly less than 5% consumption of the total supply portfolio to the automotive industry forced us to step back from producing ISF steel said Mr. Hlengani. He then added that the company realized that investing further in this meadow more would not be feasible.

The main intention of the company is to produce non-ISF material that has huge demand and thus increase the production volume to meet the demands.

He then said that except there are no other products that the company would stop producing and that they would continue to support the auto industries in South Africa constantly.

Mr.Haasbroek finally stated that “We should enjoy a competitive advantage over other countries that are not as mineral rich… but it’s a fact that we do not.”

Category : Metal

Tags : ISF steel


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About Sangeetha Pillai

Stepping into this world on 24th August, I am the younger daughter of my parents.  I did my schooling at Sacred Heart Convent High School in Hubli (Karnataka). In a perplexity of deciding my higher studies I finally consoled my mind to go with Civil Engineering. Although my ac .... more info

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