Bonang Mohale is chancellor of the University of the Free State, former president of Business Unity South Africa , professor of practice at the Johannesburg Business School in the College of Business and Economics and chairperson of The Bidvest Group, ArcelorMittal and SBV Services. He is a member of the Community of Chairpersons of the World Economic Forum and author of two bestselling books, Lift As You Rise and Behold The Turtle.
Some 450,000 tonnes of the country’s current local demand of 1.7 million tonnes cannot be supplied other than by AMSA’s Longs. The ongoing congestion at the nation’s ports means that importing these supplies is not a viable short-term option. Since 2019, AMSA has assessed, in the utmost detail and with the deployment of high-level internal and external expert resources, the Longs business’s effects on the company’s overall financial sustainability. This process repeatedly identified the substantial drain on profitability that Longs represented. In particular, we noted how Longs’ losses have hamstrung our ability to invest in capacity to produce value-added steel.
These multiple, concerted and coordinated efforts were unable to counter the adverse effects of economic malaise and a drop, over seven years, of 20% in apparent steel consumption and low activity in key steel-consuming sectors combined with poor investor sentiment;as well as electricity challenges; substantial overcapacity in the long steel segments, resulting in depressed pricing; and persistently uncompetitive billet cost versus local competitors and a mounting free cash flow drain!In 2023...
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