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Steel industry: Does AMSA bully its customers?

Steel industry: Does AMSA bully its customers?

by Gerhard Papenfus

NEASA recently received complaints from numerous AMSA customers to the effect that AMSA is employing bullying tactics towards them. The following examples were listed:

  • one AMSA customer complained that they haven’t received deliveries for 6 months. Then, unexpectedly, two deliveries were made, in excess of the company’s credit limit. AMSA demanded immediate settlement, threatening the client that, unless immediate payment is made, the particular order will be cancelled and the material will be supplied to another customer;
  • another AMSA customer complained that, although they are on allocation, the same product appears on a tender list, where the highest bidder gets the material. Consequently, this particular company, in desperate need for steel, was forced to pay a much higher price;
  • one AMSA customer complained about the fact that they needed a special type of steel. They were told by AMSA that in exchange for this ‘favour’, they had to sacrifice more than ten times their allocation for that substitute product in exchange for the small amount of special steel; and
  • complaints about the quality are simply brushed aside and the complainants are blamed for having too high standards.

Only a monopoly, hiding behind duty protection, can make itself guilty of this bullying behaviour.

If you experienced this type of bullying tactics, click here to share your story.

If you are wondering why we are embarking on THIS type of drastic action, it is because AMSA is a monopolistic, self-serving entity, kept alive by state protection, to the detriment of the entire steel industry.

Unless AMSA is capable of supplying the South African steel downstream timeously, with the correct quantity, high-quality raw material at a competitive price, all duties protecting AMSA must be scrapped. In such a scenario, AMSA has to determine how it will survive. It is not for the state to play a role in keeping this monopoly alive.

Almost 100% of the entire steel industry supports this demand. Out of approximately 11 000 companies in the steel industry, only 6 companies (including AMSA itself) support the duties protecting AMSA.

Gerhard Papenfus is the Chief Executive of the National Employers' Association of South Africa (NEASA)