06 Apr 2016

The Assistant Minister of Investment, Trade and Industry, Advocate Sadique Kebonang, says the initial shareholding of BCL in Pula Steel was 50.5 per cent and the current shareholding is 72.41 per cent.

Responding to a question in Parliament on Tuesday, he said P10.1 million and P53.6 million were injected into the project and the total investment stood at P63.7 million.

He explained that the situation on workers delayed payments and their allowances was that there was a working capital shortfall that could not be financed by commercial banks due to lack of appetite and this affected the company’s ability to pay off its salaries and wages on time for the months of January and February 2016.

He added that no employee was owed any allowance to date.  However, there were overtime allowance for the months of November and December 2015 which were paid in January 2016 and Pula Steel was paying employees’ salaries and not BCL.

Advocate Kebonang said 3 716 tonnes had been produced since Pula Steel commenced operation in October 2015 and 2 868 tonnes had so far been sold and Pula Steel customers were within the SADC region.

“Pula Steel profit forecasts are still healthy but marginal, the majority of the inputs are based on the same steel market prices so the volatility does not just affect prices but  also the cost of input,” Mr Kebonang said.

He said going forward, Pula Steel needed to ensure that the costs were kept within the threshold of 60 to 70 per cent of sales and there was a reduction in reliance on imports for inputs and there should be sufficient supply of quality scrap.

The MP for Selebi Phikwe West Mr Dithapelo Keorapetse had asked the Minister of Investment, Trade and Industry to update Parliament on Pula Steel cash flow problems and BCL Shareholding in Pula Steel and the ongoing concern of the business and in particular to apprise the house on the initial shareholding of BCL in Pula Steel and current distribution, how much BCL has injected initially and subsequently.

He also asked why workers are paid late and are owed some allowances and to state whether BCL is paying Pula Steel employees’ salaries and if so why.

Mr Keorapetse further asked the quantity and quality of steel produced since resumption of production and by how much and how the business is expected to make profit under the current steel market prices internationally and to state clearly the future of Pula Steel. Ends