News Nation Logo

BREAKING

ArcelorMittal South Africa Heads For Huge Loss; To Shed 1,000 Jobs

AMSA's South African Operations Was Acquired From Former State-owned Steel Manufacturer Iscor Almost Two Decades Ago.

PTI | Updated on: 27 Jan 2020, 08:27:46 AM
ArcelorMittal

Global steel magnate Lakshmi Mittal's ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 countries. (Photo Credit: ArcelorMittal/Twitter )

Johannesburg:

ArcelorrMittal South Africa (AMSA), the South African subsidiary of global steel magnate Lakshmi Mittal, has said it would report a R4 billion (about $2,8m) headline loss for the year ended December 2019, with plans to shed 1,000 jobs finalised as part of its cost-cutting measures. AMSA's huge loss follows on a profit of R1,37b (about $951m) in 2018. AMSA had announced plans for a large-scale reorganisation of its plants across the country six months ago. The company had said in November 2019 that it would close down its loss-making Saldanha Works due to various factors, including a global downturn in the steel market and a reduction of the plant's export edge due to high costs of electricity, rail transport and price regulation.

Despite government pleas to reconsider the huge impact this would have on the South African economy, AMSA has announced that the Saldanha Works closure would be finalised in the first quarter of 2020. AMSA, however, said any closure of significant long-steel production plants was not on the cards in the foreseeable future, including the Newcastle plant which too had been under threat.

Born out of the former state-owned steel manufacturer Iscor in 1989 after Mittal had helped turn around its ailing fortunes, AMSA said in statement here that 2019 had been a very challenging year for the company. AMSA said it would be placing an emphasis on cash preservation as it aimed at long-term preservation.

"A large-scale employee reorganisation, as announced on SENS on July 10 last year, has been largely finalised and resulted in a reduction of over a thousand own employees. Additionally, a significant repricing and rescoping of sub-contractor services will be completed by the end of the first quarter of 2020," it said.

ArcelorMittal has reported a net loss of USD 539 million for the July-September quarter of 2019 hit by lower steel shipments and prices, and high material costs. Sales of the company declined to $16,634 million in the July-September quarter from $18,522 million in the year-ago period.

For all the Latest Business News, International News, Download News Nation Android and iOS Mobile Apps.

First Published : 27 Jan 2020, 08:22:54 AM

Videos