Steel tube and pipe manufacturer Robor has been
placed into voluntary liquidation.
Investment holding company Tiso Blackstar, which
owns 47.61% of Robor, on Wednesday reported that the decline of the South
African economy over the past three years, the margin-eroding effect of cheaper
Chinese imports, delays in the signing of power purchase agreements with
independent power producers and the financial difficulties faced by power
utility Eskom had “caused systemic harm” to production and revenue
generation in South Africa’s steel tube and pipe manufacturing sector.
It added that the “progressive demise” of
Robor’s business had been further exacerbated by insufficient volumes as a
result of excess production capacity in South Africa after 2010 and the
pervasive effect of cheaper imports from the East; the imposition of import
duties by the US on imported steel, which plagued Robor’s sales of specialised
steel pipe into the US oil and gas industry; the effective cessation of Eskom’s
planned 5 000-km investment in additional power transmission lines; and the
South African government not extending import duty and tariff protection to
downstream industries, “thereby exposing steel fabricators to huge margin
erosion to compete with imported steel-manufactured goods”.
Despite efforts by Robor’s management to right-size the operations, to procure additional tonnages for its manufacturing facility and to source additional capital, Robor became increasingly unable to maintain the required levels of working capital and liquidity to retain its going concern status. http://www.engineeringnews.co.za/article/robor-goes-into-liquidation-2019-10-02
