Further job losses are imminent at components manufactuter Dorbyl if steel prices continue to increase and the rand strengthens further, the company’s chief executive, Bill Cooper, said.
Further job losses are imminent at components manufacturer Dorbyl if steel prices continue to increase and the rand strengthens further, the company’s chief executive, Bill Cooper, said.
Cooper said on Tuesday that the company, which cut 700 jobs last year, could face further job cuts if steel manufacturer Ispat Iscor implemented a 34 per cent increase in the steel price, stated.
CARtoday.com reported two weeks ago that Ispat Iscor was expected to increase the prices of its products from December 1.
"These increases, if implemented, will have a significant negative impact on local component (steel based) pricing," Naamsa chairman Nico Vermeulen said at the time.
"The raw material price increases will also impact negatively on the industry's export competitiveness."
The company manufactures car wheels at three of its factories, but Cooper said the wheels division was already marginal. He added that it faced rising costs of manufacturing and a strong rand, and also widespread cheap imports.
"We are facing imports of steel wheels below our raw material price," said Cooper.
Improvements in revenue and operating income helped lift the group's earnings though profit after tax dropped by 36 per cent. Dorbyl has operations both in North America and South Africa.
Strong domestic demand for cars helped to expand the local operation's revenue by 14 per cent to R500 million. This helped to offset the effects of the strong rand on its exports.
Meanwhile, Cooper said that Ispat Iscor's takeover by AngloDutch group LNM earlier this year was "unfortunate" for the steel sector in SA.
Original article from Car