South African suppliers to the US gets benefited from U.S. sanctions on Rusal

Sanctions on Russian suppliers exporting to the US have indirectly helped some other aluminium producers and aluminium product manufacturers. Johannesburg-based precision water-cutting and -profiling company AquaJet Profiles reported record-high aluminium sales profit margins earlier this year, owing to the sanctions, company director Preeshan Naidoo says. Since US domestic manufacturing has become costlier because of the price rise in imported raw materials and tight supply, countries like South Africa is exporting more finished products to the US.

“South Africa needs to acknowledge the significance of the US markets. While there is potential in emerging markets, and not forgetting the huge client base in the Asian market for raw materials, the US is still one of the largest consumers of finished products,” Naidoo said, emphasising South African producers’ dependence on the US markets.

Though they were benefitted by exports, factors like policy restrictions, rising labour costs, rising electricity costs and potential amendments to the South African Constitution negatively offset the South Africa’s economy as well as the aluminium industry, he added.

He credited the quick growth of aluminium industry to the advancements brought about by the Fourth Industrial Revolution or Industry 4.0.

“Advances in artificial intelligence are being exercised and will reduce labour negatively by impacting on the unemployment rate,” Naidoo outlines.

He insisted on the need for education and training in the aluminium and general metals industry in South Africa to produce more value added products.

“We require the development of more finished products for local manufacturing. We should be challenged to add more value to our raw materials and commodities prior to export,” Naidoo maintains.

He maintains that utilization of domestic raw materials in the local manufacturing sector will create jobs, increase GDP and earn export revenue.

“South Africa is a commodity-rich country and should export more finished goods, building on the significant potential of the automotive sector in the manufacturing industry,” Naidoo concludes.