Africa's largest steel mill, ArcelorMittal SA, decided to relocate its operations in Saldanha for maintenance following an operational review, and the group concluded that Saldanha had lost its structural competitive price advantage, mainly due to high raw material costs. and regulated prices. Cobus Werster, Chief Executive Officer of ArcelorMittal South Africa, said: “Saldanha's operations were founded and based on a low cost premise that provided a competitive cost advantage in export markets. Unfortunately, over the years, this structural cost advantage has been eroded and Saldanha can no longer compete sustainably and effectively in these markets, mainly due to raw materials and regulated prices. Saldanha has suffered significant losses in the past and the outlook remains bleak in the short and medium term. ”
ArcelorMittal said: “Despite various initiatives that have been successfully implemented by the company to manage costs and optimize efficiency, ArcelorMittal's operations in South Africa, Saldanha Steel, remain under extreme pressure. The board and management, which have been considering various options for ensuring the company's long-term sustainability for some time, formally announced a revision of the strategic asset footprint in September 2019. The outcome of the first phase of the review is to immediately begin the process of winding down Saldanha's steel operations to curb any further losses. This process is expected to be completed in the first quarter of 2020. "
He added: “Progress has been made in the next phase of the Strategic Assets Review, which will focus on operations in Newcastle and some of the long-range steel mills with a view to sustainably improving their value and service offering structures. At this stage of the review, it will be important to examine the benefits of concentrated operational impact. ”
The Saldhana plant was commissioned in 1998 and has a capacity of about 1.2 million tonnes per year. The plant is distinguished by the combination of advanced technologies to produce high quality ultra-thin 1.6mm hot rolled coil.
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