Tata competing against Arcelor Mittal in South Africa
Indian steel giant Tata faces an uphill battle if it tries to take on the world's number one steel producer Arcelor Mittal in South Africa.
JOHANNESBURG: Indian steel giant Tata faces an uphill battle if it tries to take on the world's number one steel producer Arcelor Mittal in South Africa, according to a leading South African business newspaper on Wednesday.
Business Day newspaper quoted steel analyst Dirk Kotze as saying the South African market was "too small to accommodate more than one world-class steel producer." The advantageous pricing Arcelor Mittal SA enjoys on iron ore from South African company Kumba Iron Ore gave it a significant competitive advantage, he said.
The comments followed reports from India Tuesday that Tata was considering building a carbon steel plant in South Africa with a capacity of 5 million tonnes annually.
The South African government is anxious to mount competition to Arcelor Mittal SA, which has a monopoly on the local market for steel products.
Last week Arcelor Mittal SA, which is 52 per cent owned by Arcelor Mittal, was slapped with a 692-million-rand (96 million dollar) fine by the country's Competition Tribunal for "excessive pricing" in contravention of the Competition Act.
In a bid to force down Mittal's pricing the government has commissioned a feasibility study on a state-funded carbon steel plant.
A senior official in the Trade and Industry Ministry confirmed the government was in talks with Tata "and a number of other players" about the building of the plant, Business Day reported.
Business Day newspaper quoted steel analyst Dirk Kotze as saying the South African market was "too small to accommodate more than one world-class steel producer." The advantageous pricing Arcelor Mittal SA enjoys on iron ore from South African company Kumba Iron Ore gave it a significant competitive advantage, he said.
The comments followed reports from India Tuesday that Tata was considering building a carbon steel plant in South Africa with a capacity of 5 million tonnes annually.
The South African government is anxious to mount competition to Arcelor Mittal SA, which has a monopoly on the local market for steel products.
Last week Arcelor Mittal SA, which is 52 per cent owned by Arcelor Mittal, was slapped with a 692-million-rand (96 million dollar) fine by the country's Competition Tribunal for "excessive pricing" in contravention of the Competition Act.
In a bid to force down Mittal's pricing the government has commissioned a feasibility study on a state-funded carbon steel plant.
A senior official in the Trade and Industry Ministry confirmed the government was in talks with Tata "and a number of other players" about the building of the plant, Business Day reported.