The Minister of Trade and Industry Minister, Dr Rob Davies has welcomed ArcelorMittal South Africa’s (AMSA) initiative to remove cargo from the road network and transferring it to rail transport, saying it is in line with government’s national economic development objectives. Minister Davies was speaking at the opening of AMSA’s Isando Distribution Centre in Kempton Park, Ekurhuleni.

The centre was established to migrate AMSA’s final product steel dispatches from road to rail from its production facilities in Newcastle in KwaZulu-Natal and Saldanha in the Western Cape to its customers in Gauteng. 

“We welcome this project because it ticks a number of boxes in regard to the economic development objectives that government has set itself.  Both government and business have recognised the role of appropriate, effective and efficient infrastructure as a driver of economic growth in South Africa, and called for the cost of doing business to be reduced in order to enhance the competitiveness of the country’s goods and services,” said Minister Davies.

He added that government had identified the crucial role that transport, and rail in particular, plays in achieving the strategic objectives of competitive and sustainable industry development that can lead to job creation, poverty alleviation and positioning SA as the investment destination of choice in Africa.

“The project is part of the implementation of the back to rail strategy, a key initiative that migrates the transportation of products from road to rail. This will result in a significant reduction of carbon emissions, road congestion and preserving road infrastructure.  Efficient and cost effective rail transport and logistics have been identified as a key enabler for a sustainable and competitive steel industry in South Africa. Downstream will benefit as a result of reduced lead times for domestic and a cross-border customers. Today more than 50 jobs have been created through the establishment of the distribution centre and more will be created when volumes increase,” said Minister Davies.

He added that government was also impressed by the partnerships and collaboration amongst various key stakeholders that worked with AMSA to make the project a reality. These include Barloworld, Transnet, Grindrod and Newlyn Group.

“We anticipate that the establishment of this facility and resulting partnerships will catalyse the development of further rail solutions to migrate road volumes to rail thereby extracting efficiencies from the rail system and lowering the cost of logistics for key sectors in South Africa,” said Minister Davies.

According to the Chief Executive Officer of AMSA, Mr Wim de Klerk, the establishment of the centre is the first stage in a long term strategic initiative to migrate all domestic steel dispatches from road to rail. The second stage of the initiative will entail the migration of steel dispatches into sub Saharan Africa from road to rail, through the establishment of distribution hubs in various locations in the region.

Issued by Department of Trade and Industry