Global Fastener News

South African Fastener Manufacturers’ Chairman: Currency is Biggest Trade Problem

John Wolz

FastenerNews.com MEDIA SPOTLIGHT
South African Fasteners Manufacturers Association chair Rob Pietersma told Engineering News the biggest problem facing the industry is the strength of the country’s currency, the rand.

“Importers benefit from a strong currency but from an export perspective, South African manufacturers are finding it a challenge to compete,” Pietersma told the South Africa trade publication. That increases “pressure in the form of pricing loyalty, which tends to support European manufacturers.””

South Africa’s fastener exports traditionally averaged 6,000 tons a year, but recently have dropped to 3,000. South Africa manufacturers produce 82,000 tons of fasteners annually valued at 1 billion rand (US$152.5 million). About R600 million (US$91.5 million) of fasteners are imported annually, Pietersme estimated. Those include stainless steel products and highly specialized fasteners, which “are uneconomical to manufacture locally.””
The recent strength of the rand has increased foreign products entering South Africa, Pietersma observed. “The disadvantage is created by a number of factors, including the import parity pricing model used by steel mills in South Africa,” Pietersma explained. The country has higher labor costs than most other countries, he noted. State-owned enterprises are allowed to run at a loss, provided that foreign exchange is generated, Pietersma added.

Safma has renewed anti-dumping duties against Chinese and Taiwanese nuts and bolts, but the duties are not as comprehensive as Canada imposed. “China and Taiwan have dumping levels of 52% and 64% respectively, with the subsidy level being 32% and 7%,” Pietersma told Engineering News.

Editor’s Note: Articles in Media Spotlight are excerpts from publications or broadcasts which show the industry what the public is reading or hearing about fasteners and fastener companies.
The South African Fasteners Manufacturers Association (Safma) operates under the umbrella of the Steel & Engineering Industries Federation of South Africa (Seifsa). Rob Pietersma is chair and T. Botha, administrator. E-mail: Theresa@seifsa.co.za �2005 FastenerNews.com