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Top South African CEO under fire

ArcelorMittal South Africa chief executive Kobus Verster is facing a tough time as the company is looking to close plants and retrench staff.

Last week, ArcelorMittal announced that it plans to wind down its longs steel business due to challenges in the local steel industry.

The company cited prolonged weak economic conditions, logistics and energy challenges, and unsustainable competition from low-cost imports as reasons for its decision.

It explained that it could no longer delay the drastic action as it could affect the company’s sustainability.

“The board and management of ArcelorMittal South Africa have a fiduciary and legal duty to ensure that the overall business remains sustainable in the longer term,” it said.

Therefore, the company announced that it has no option but to proceed with the wind-down of its longs business. The business will be placed into care and maintenance.

CEO Kobus Verster is in charge of ArcelorMittal South Africa and is the face of these retrenchments.

Verster said he is disappointed that all their efforts over the last year have not translated into a sustainable solution.

The company blames the government for not acting when it was warning about the challenges in the South African steel industry.

In February 2021, the government was warned about the challenges facing the steel industry, which mirrored ArcelorMittal’s statements.

Verster said the government is willing to listen but unable to make decisions. He argued that the government could have done more to avoid this situation.

The Department of Trade, Industry and Competition (DTIC) said it was ‘seriously concerned’ about ArcelorMittal’s plan to shut down part of its business.

The department said it remains committed to working with ArcelorMittal South Africa to find a workable and lasting situation,

“During 2024, AMSA had reached out to various government departments and state-owned entities with requests for different concessions for its business.”

“It has always been, and continues to be, the intention of the government to continue these engagements.”

The face of ArcelorMittal South Africa

Kobus Verster is the chief executive of ArcelorMittal South Africa and the face of the retrenchments at the company.

He is a steel industry veteran who started his career at Iscor South Africa, which later became ArcelorMittal South Africa.

He was chief financial officer and executive director of ArcelorMittal South Africa from February 2006 to August 2010.

Before being appointed chief financial officer, he was general manager of corporate treasury at Mittal Steel in Rotterdam.

Before he moved into the C-suite, he held various senior roles in financial management and treasury at Iscor.

He left the steel producer to serve on the construction and engineering company Aveng’s board as chief executive officer from 11 February 2014 until 26 September 2017.

During his tenure as Aveng CEO, the share price plummeted by 86%, indicating that the company struggled during this period.

Verster left Aveng in 2017 and took over the reins as ArcelorMittal South Africa from Wim de Klerk in February 2018.

Since his appointment, the ArcelorMittal SA share price has lost 67% of its value. However, it should be noted that it was on a rapid downward trajectory already.

Verster is now facing another challenge, with the government, unions, and other stakeholders expecting a miracle from him to save the longs steel business.

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