REGULARS: ROOFING MATTERS
A
s macro-economic factors
(political landscape, steel price
and legislation) continue to
influence the business landscape in South
Africa, Justin Jackson, head of sales and
operations at Safintra, shares his view on
the past year and his thoughts on the future
of the steel industry in South Africa.
Jackson’s view is that 2017 was a
challenging year for the steel industry in
many respects.
“It started with the implementation of
duties on steel imports on hot rolled coil in
March 2017. The stated motivation from
the government is to protect the about
36 000 jobs in our steel sector. This duty has
probably had the effect of protecting a steel
manufacturer but has placed severe
hardship on the downstream industries.
This has been a major contributor to the
general increase in steel prices in
South Africa.”
Factors that ruled 2017
It is estimated that South Africa’s GDP
growth for 2017 was 0.90%, which resulted
in disappointing growth for the
construction industry. Therefore, the
biggest challenge for 2017 has been the
general downturn in the economy, which
coupled with the price increases, resulted
in a general decline in business in the
construction sector of about 20%
year-on-year.
“This downturn and the political fracas
have affected Investor confidence in 2017.
This can be attributed to the political
uncertainly of the ANC elective conference
in December and the various state capture
allegations. There is however some good
news on the horizon. Forecasted growth for
2018 should exceed that of 2017, and we
have seen a slight up-tick in business
during Q4 of 2017. This will result in a more
sustainable business climate. There are of
course various factors that could swing the
general sentiment negative again. For
example, if Moody’s downgrades the
country in February, this will have severe
ramifications for the economy and our
business sector, in particular.”
2018 and beyond
Jackson describes the industry as a
reflection of the growth in the market,
“When there’s not much growth in the
market, there’s not much opportunity to
supply developments.” A small growth rate
translates into lower margins.
According to him, the major aspect that
characterised the year and should be
implemented in future are cost
containment, debtors management and
margin management. “Have the right cost
structure to manage the volumes coming
through is crucial to keeping a business
open. These are the three pillars by which
we manage our business,” he advises.
Jackson’s outlook on 2018 remains
conservatively optimistic with some
opportunities awaiting the industry in 2018.
“Things won’t change too much. I don’t
think there’s going to be massive growth in
the market, but there will be some growth.”
He is however optimistic about the
growth potential in the medium term;
“Depending on government stance on the
various issues we are facing and the
2017 was a
“ challenging
year for
the steel industry in
many respects.”
outcome of the election in 2019, growth as
we know it will return from about the
second half of 2019. For 2018 we should
focus on the micro environment and as a
business, focus on what we can control!”
he says.
The wrap
“Businessmen by their nature have to be
positive about the future. All we need in
South Africa is for a few small things to fall
into place (mostly out of our direct control)
and things will recover quickly. South
Africans are resilient, and we will be there
when the up-turn comes!”
ABOUT JUSTIN JACKSON
Jackson is the head of sales and
operations at Safintra South Africa and
has been with the Safal Group since
2008. He has an honours degree in
Marketing and Supply Chain
Management from the University of
KwaZulu-Natal. Jackson joined the
group in sales and has built a highly
successful career over the past 10
years, including managing various
branches (large and small) within the
Safintra Group.
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RESIDENTIAL // COMMERCIAL // INDUSTRIAL
MARCH 2018
27