R5bn to support firms affected by global slowdown

Economic Development Minister Ebrahim Patel says a multi-billion rand fund has been established to support companies affected by the global slowdown‚ such as the steel industry.

This would be geared at stabilising production‚ reducing job losses and improving competitiveness.

“We are setting up a new R5 billion fund supported by the Unemployment Insurance Fund‚ and (Labour) Minister Mildred Oliphant is working closely with us on that‚ to assist companies affected by the global and local slowdown‚” Patel said.

“But we want something from them too – commitment to invest and modernise their plans‚” the minister said.

He made the announcement when he addressed the second day of the debate on the State of the Nation Address in the National Assembly on Wednesday‚ as reported by the government news service.

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SA’s steel industry in particular is in decline‚ as it battles to compete against cheap Chinese imports.

Trade unions on Tuesday urged the government to step in to prevent the collapse of SA’s second-largest steel maker‚ Evraz Highveld‚ which has issued retrenchment notices to 1‚800 staff members‚ Business Day reported. This resulted from the Department of Labour’s non-payment in a previously agreed training layoff scheme‚ and also the failure of the state-mandated Industrial Development Corporation (IDC) to provide additional funding of R150 million. The funding was critical for the continuation of Highveld as a going concern‚ and might now result in the complete winding down of the business and the retrenchment of all employees‚ according to Solidarity and the National Union of Metalworkers of SA (Numsa) said.

Patel said the government was working to capitalise on opportunities in the rest of the continent.

“Last year for the first time‚ other African countries became our single biggest regional market‚ overtaking Asia. We exported R303 billion worth of goods to other African countries‚ supporting roughly a quarter million South African jobs.”

Demand for SA goods was varied‚ he said: “Half of the trucks we make in South Africa and that we export to anywhere else in the world go to other African countries…. (and) 60% of all the fruit juice that we export goes to other African countries”.