South African History Online

Speech by President Nelson Mandela at the opening of the Columbus Stainless Steel Plant

Middelburg, 8 February 1996

Chairman and Chief Executive of Columbus Joint Ventures;
Distinguished
guests;
Ladies and gentlemen.

Today marks an important milestone in our struggle against poverty and
underdevelopment. The realisation of this mammoth project gives our country a
strategic asset and challenges us all to ensure that as a nation we derive the
maximum benefit from it. I am greatly honoured and very pleased to be here to
share this moment with you.

This plant represents a huge endeavour on the part of all Columbus employees
and contractors. It is a tribute to your ability to work together under
difficult conditions, to master new state-of-the-art technologies and to do this
all on schedule and within budget. I would like to use this opportunity to
congratulate each and every one of you on a job well done.

Columbus also celebrates a bold investment in the future of South Africa,
based on a decision some years back when investor confidence stood in need of
such examples. If we are to realise South Africa's full potential and discharge
our shared commitment to create a better life for all South Africans, then
increased investment, domestic and international, is of critical importance.

Ladies and gentlemen;

This plant should become an integral part of our national industrial
strategy, which enjoins us to increase the level of mineral beneficiation as a
means of increasing employment and adding more value to our natural resources
before export. This process will eventually help move us from being a Third
World exporter of primary commodities to a First World exporter of manufactured
products.

Our country has the world's largest reserves of chromite ore. It has huge
iron ore resources. In addition the Southern African region is a major nickel
producer. These three metals are the basic constituents of the stainless steel
to be produced by this plant. Instead of exporting the raw materials to be
worked on in other countries, Columbus will be beneficiating them into
value-added material in South Africa.

But even as we celebrate the imagination, the skill and the labour which
accomplished this feat, we should see its completion as just a beginning.

The process of adding value should not stop here: The stainless steel
produced by this plant can provide the raw material for a host of manufacturing
plants making items such as pots, pans, cutlery, automotive components,
construction items, containers and tanks. Activity of this kind already
stimulated by Columbus can be multiplied many fold.

Thousands of jobs were generated in construction of the plant. Its operation
will add enormous value to our minerals, and make a significant contribution to
our foreign exchange earnings. These are vital contributions to our economy. But
the plant will by itself add few permanent jobs to the number employed by the
earlier Middelburg Steel & Alloys plant. The employment opportunities it
brings lie rather in the vast array of potential fabrication activities using
stainless steel manufactured in this plant.

The Department of Trade and Industry has embarked on a new strategy of
promoting industry clusters in which the large capital-intensive upstream
producers come together with the small labour-intensive downstream producers, to
collaborate in the manufacture of internationally competitive finished products
for export.

The success of this strategy depends on our emulating the practice of
partnering, so successfully used in the Far East to achieve rapid development of
competitive downstream industries and massive employment creation. Columbus,
with all its resources could partner with its customers by providing
competitively priced feedstocks of a high quality, by helping them keep abreast
with international product development and by assisting in the marketing of
their products.

A stainless steel cluster would bring together all the actors that impact on
the international competitiveness of our finished stainless steel products. That
would include amongst others those involved in production; finance; human
resource development; transport; government, labour, and development
organisations, marketing companies and, most importantly, the downstream
manufacturers.

Such a cluster would identify the constraints to the sector's competitiveness
and seek solutions to them. Government, through the Ministries of Trade and
Industry, Finance, Transport and Labour is committed to assisting in the removal
of constraints to our international competitiveness. The Industrial Development
Corporation, who are a one-third partner in this plant, have launched a
stainless steel cluster study whose results will assist the transformation of
the sector and help realise its large employment creation potential.

In the past, the large producers of raw materials essential to our
manufacturing industry saw the local market as an opportunity to increase
profits in order to cross subsidise their exports. The result was an
uncompetitive manufacturing sector that survived in the local market as an
opportunity to increase profits in order to cross subsidise their exports. The
result was an uncompetitive manufacturing sector that survived in the local
market thanks to the protection of high tariffs. Our World Trade Organisation
membership means that these tariffs are coming down. To survive, and indeed
expand into exports, our manufacturing sector needs competitively priced raw
materials.

Columbus could provide the basis for a massive job creation. Stainless steel
fabrication offers immense potential for small, medium and micro-scale
enterprises that tend to be labour intensive. It also offers openings for
entrepreneurs from the black community, previously denied such opportunities. We
appreciate that Columbus has made some progress in this field, but the
possibilities are enormous.

I understand that Columbus has an Action Plan to increase the proportion of
its product used domestically. The Department of Trade and Industry believes
that with the support of government even higher targets are achievable, with a
possible employment-creation potential in 10 years of about 100,000 jobs.
Government stands ready to become your partners in developing a world class
stainless steel manufacturing export industry.

We emphasise the employment potential beyond this plant, because that is
where the most far-reaching consequences of the project lie. We do so confident
that Columbus is sensitive to the opportunities which a new enterprise of this
kind offers for ensuring that the values and practices of our new non-racial
democracy characterise work-place relations.

Ladies and gentlemen;

We do realise that most of your energy has been absorbed by the colossal task
of getting this, the world's largest stainless steel plant, up and running. We
salute you on the great achievement. But this is just the first step in a much
greater endeavour, namely, the creation of a manufacturing sector capable of
exporting onto the world market, and the massive job creation that will bring.

I wish you all the best of luck.

Issued by: SA Communication Service