Why Duferco is just walking away

Ludovico Sanges is MD of Duferco, one of the biggest producers of galvanised and coated steel products in South Africa. The corrugated iron on your roof could easily have been milled at its plant in Saldanha. Durferco is also easily one of the biggest employers on the West Coast. But the company and its MD have been caught sup in the government increasingly erratic attempts to protect the single primary steelmaker, Arcelor Mittal, from steel imports and one of the biggest users of scrap, Scaw Metals, from a shortage of scrap. So exports of scrap are to all intents and purposes impossible now. Two years ago they earned the country R6bn. Duferco’s response to the inevitable price increases that accompany import duties has been to opt out of the local market altogether. It means it can import duty free from wherever it wants (there’s plenty of steel around) and then export it. Sanges says it has saved his business, which one way or another feeds 1000 souls. Listen to him talk to Peter Bruce in this edition of Podcasts from the Edge. At the end he reveals he asked ITAC the department of trade, industry and competition’s trade regulator, a year ago if it would consider giving Duferco a rebate on the 10% duty it would have to pay to import and sell its product in the SA market — where it is highly rated and where it would introduce more price competition. He still has not had an answer. If he was allowed the rebate it would lower domestic prices and he could hire back the 50 people he let go last year and put 100 truck drivers back on the road. (The sound quality is not the best; apologies)