With commercial assertions of possible steel finished product dumping, (as Chinese steel production at home exceeds the domestic market demand by customers), another South African steel company faces a financial crisis.
Too many assets on the Balance Sheet.
Too many employees given the business decline these past two years.
South Africa’s 2nd largest steelmaker Evraz Highveld Steel and Vanadium confirmed that it had temporarily ceased steel production at its steelworks. The company cited “working capital constraints and reduced domestic demand…” It also cited a “significant” increase in steel imports from China.
From raw resources like iron ore and met coal to scrap metal to charge steel furnaces, the global picture of the FOREST is that we can see a lot if the TREES “burning”.
LOCAL JOB IMPACT
Evraz Highveld Steel and Vanadium has issued a proposed restructuring notice in terms of South African laws Section that could see the country’s second-largest steelmaker potentially cutting half of its workforce.
The local labor organization are demanding discussion to how to fix the global market locally. Their leadership appears to be in self denial. Transnet’s grand 7 year market development plan now approaching year four of execution also appears to be unadjusted to these global market shifts and local South African customer changing logistics service demand of the rail and ports future services.
Sooner or later, Transnet will have to adjust. If not, it may over invest in unproductive added assets. What do you think?
For more news coverage, I encourage you to log onto the following links http://www.engineeringnews.co.za/article/evraz-highveld-moves-to-cut-half-its-workforce-2015-07-21/rep_id:3182 And http://www.engineeringnews.co.za/article/cash-hungry-steelmaker-evraz-highveld-halts-operations-2015-07-20