cHIEF EXECUTIVE OFFICER’s report An Even Tougher Year
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or a number of reasons, the 2015/16 financial year was even more difficult for the global economy, the South African economy and many sectors in it, among them our own metals and engineering sector. The domestic mining and construction sectors to which ours is a significant supplier continued to struggle as international commodity prices fared no better than they did the year before, with only the auto-manufacturing sector holding its own, thanks in no small measure to the very attractive Government incentives to attract and retain original equipment manufacturers in the country. South Africa’s sovereign debt continued to grow as the local currency, the Rand, took a heavy beating, without resulting in much benefit for local exporters, as those who have repeatedly called for a weaker Rand over the years have hoped would happen. South African manufacturers found themselves facing unfair competition from East-Asian exporters which, in addition to enjoying the advantages of considerably lower input and administered costs when compared to South Africa, also had
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the added benefit of subsidies in their home markets. Regrettably, the Government took long to react to these instances of dumping, moving to impose import tariffs on steel imports only once affected parties like domestic steel manufacturers, organised labour and employer bodies organised themselves into a powerful lobby group. The year under review was one during which Section 189 Notices were very much in the news. As local markets shrunk and many South African manufacturers found it difficult to remain competitive in the export market, many companies across the metals and engineering sub-sectors had no choice but to contain costs through, among other ways, restructuring and retrenchments. For some, the cuts that had to be made were deeper than others, while other companies merely had to shave off some fat off their fixed staff costs. Regrettably, even with these necessary remedial steps, some companies still found themselves having to be placed on business rescue or even liquidated. In many ways the 2015/16 financial year was one that witnessed, in the words of National Union of Metalworkers of South Africa (NUMSA) General Secretary Irvin Jim, “a jobs bloodbath” whose effects are likely to continue to be felt for years to come. SEIFSA, which represents employers in what is currently a struggling metals and engineering sector and which counts companies mostly in the self-same sector as consumers of its products and services, was not immune to these economic headwinds. The Federation struggled to make its revenue budgets, with the exception of the Human Capital and Skills Development Division, which finished on target. As a result, decisive actions had to be taken timeously to reduce the Federation’s fixed costs. For the very first time in SEIFSA’s history, we embarked on two rounds of retrenchments, parting ways with 11 staff members. We also froze a number of vacancies that arose, parcelling work out to already over-worked individuals who remained in the Federation’s employ. By the end of the year, our established staff complement had shrunk from 43 to 32. Among the colleagues who parted ways with SEIFSA in the course of the year was Deputy CEO Elsa Venter. That position was abolished and its responsibilities were shared between Operations Director Lucio Trentini and the CEO. I thank Mrs Venter and the other employees who parted ways with SEIFSA in the course of the year for their service to the Federation over the years and wish them well for the future.
Kaizer Nyatsumba
SEIFSA ANNUAL REVIEW 2016
