Strike in South Africa's steel and engineering sector costs USD 28mn daily – employers body

By bne IntelliNews July 2, 2014

The strike in South Africa’s steel and engineering sector that started on July 1 costs the industry more than ZAR 300mn (USD 28mn) daily, equivalent to 0.014% of the country’s daily gross domestic product, Kaizer Nyatsumba, head of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA), said in a statement.

“Ours is a very strategic sector with both upstream and downstream impacts on other important industries like mining, construction and auto manufacturing. Therefore, it is not just companies in the sector that are affected or stand to be affected, but it is also those companies in these other industries,” Nyatsumba said.

The National Union of Metalworkers of South Africa (Numsa), the country’s leading manufacturing union representing more than 220,000 workers in the metal and engineering industries, launched the indefinite strike after reaching a deadlock with employer bodies – SEIFSA and National Employers Association of South Africa (NEASA) - regarding the collective bargaining demands of workers. Numsa demands a 15% wage increase in a one-year bargaining agreement, among others, above the annual inflation rate, which hit a five-year high of 6.6% in May. Nyatsumba called Numsa’s demands “lofty” and expressed hopes that employers and labour would “find one another over the next few days”. A meeting between the leadership of SEIFSA and NUMSA and labour minister Mildred Oliphant has been tentatively scheduled for Friday (July 4).

Nyatsumba said also that the CEO of an unnamed major car manufacturing company had informed him that he was under “considerable pressure” from his head office in America to close operations in South Africa and to move them to a country with a more stable labour dispensation. According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), the impact on vehicle production and exports would start to be felt if the strike continued beyond two weeks.

The steel and engineering strike will aggravate further the fragile South African economy, which was severely hurt by a 5-month industrial auction in the platinum mining sector. The platinum strike, which ended last week, caused a 25% contraction in the mining sector and a 0.6% q/q decline in GDP in Q1 2014.

Last year, South Africa’s vehicle manufacturing sector, which accounts for about 6% of economic output, was crippled for about two months due to Numsa-led strikes. A three-week strike at the country’s seven major vehicle manufacturing plants caused a production revenue loss of about ZAR 20bn (USD 1.9bn) and was followed by a month-long strike at auto components factories.

Related Articles

AB InBev sells 54.5% stake in African Coke bottling business for $3.15bn

Anheuser-Busch InBev will sell a 54.5% stake in Africa's largest Coke bottler to Coca-Cola Company for $3.15bn, the two companies said in a joint statement on December 21. The deal is expected to ... more

IMF slashes South Africa’s 2016 growth outlook to 0.7%

The International Monetary Fund (IMF) has lowered sharply its 2016 GDP growth forecast for South Africa to just 0.7% from 1.3% anticipated in October, its World Economic Outlook (WEO) update released ... more

MTN Nigerian fine raised back to $5.2bn, court refuses to freeze company bank accounts

The record fine, imposed on South Africa-based telecoms group MTN by the Nigerian Communications Commission (NCC) has been raised back to $5.2bn, publications in local media revealed. The ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss