The Minister of Trade and Industry, Dr Rob Davies has opened a R1 billion Safal Steel's metal coating facility at Cato Ridge in KwaZulu-Natal.
Speaking at the event, Davies said the steel industry is one of largest manufacturing sectors in the domestic economy and very critical from an economic development point of view. He said the industry has strong linkages with other industries, across the South African economic landscape.
"Through its backward linkages it draws in products from a range of mining activities and its forward linkages extend to downstream value-adding activities and financial services. We regard metal coating as part of downstream activities and the facility we are at today will deepen the value-addition of Hot Rolled Coil currently produced in SA.
"As government presses ahead with the CAPEX programme, roof sheeting will become a key input especially on the housing programme," said Davies. He emphasised the linkages between infrastructure development and manufacturing and that investment projects that enhances productive capacity such as this metal coating facility be noted and supported.
He added that the project also presents significant potential for job creation and skills development. "I believe that the facility is manufacturing and supplying coated steel roofing to both the local and global markets with 60% of the product targeted for the local market and the balance for exports. The facility has already created 370 jobs, mainly employing people from local community, Durban and Pietermaritzburg.
"We understand the whole facility has a capacity of 150 000 tons a year on both un-painted and painted coated coil, sold onto the roofing and general engineering sectors and that there are plans to double the volumes to 300 000 tons in the near future.
"The aspiration to enter other markets such as the automotives and white goods are well supported as it will enhance deepening of value-addition and creation of decent jobs in these sectors as envisaged in the Industrial Policy Action Plan," he said.
Minister Davies said that the event was testimony to the important partnership that has been built between business and government and the role that business is playing towards the country’s economic and industrial development.
"This investment, supported by the DTI and in which the Industrial Development Corporation (IDC) also participated, clearly demonstrates Safal Group's confidence in South Africa as an investment destination and the maturity of our steel industry. Through the DTI's Enterprise Investment Programme, R30 million was approved for this investment of which R22.5 million have been paid and R9 million support was granted under the Critical Infrastructure Programme. IDC also provided significant funding facilities for the project.
He stated that the Department understands the significance of this project and will assist in dealing with challenges that may hinder its long-term viability.
Minister Davies emphasised the significant presence of Safal Group in the African continent and the strategic positioning of this investment given the aspirations of regional integration in Southern, Central and Eastern Africa. Safal Group is currently operating in sixteen African countries.
Sidwell Medupe
Departmental Spokesperson
Cell: 079 492 1774
Tel: 012 394 1650
E-mail: MSMedupe@thedti.gov.za
