One of SA’s biggest steel pipe producers closes its doors as Eskom, Chinese imports bite

The 90-year-old Robor, once one of southern Africa's largest suppliers of steel, tube and pipe, will close its doors.

On Wednesday morning, Tiso Blackstar – which holds a stake of almost 48% in Robor – blamed its demise on the weak state of the economy and cheap Chinese imports, among other factors.

In addition, "delays in the signing of Independent Power Producer agreements with the South African Government and the well-publicised financial demise of Eskom have caused systemic harm to both production and revenue generation in South Africa’s steel tube and pipe manufacturing sector," Tiso said.

It also said that new US import duties on imported steel, hurt Robor's sales of specialised steel pipe into the US oil and gas industry, previously a lucrative export market.

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Eskom's decision to stop a planned 5 000 km investment in additional power transmission lines, an initiative in which Robor had invested extensively, also hit the company.

Tiso also blamed government for not extending import duty and tariff protection to downstream industries, "thereby exposing steel fabricators to huge margin erosion to compete with imported steel-manufactured goods".

Germiston-based Robor has seen a sharp slump in volumes over the past 18 months, and despite restructuring, cost-cutting and new deals with credit providers, have not been enough to stop the company's decline.

"In addition, the company explored numerous avenues to raise additional capital for Robor including selling Robor as a going concern, merging with a competitor and a break-up and sale of individual Robor group companies."

Tiso Blackstar says it was unable to commit any further capital to Robor.

Robor's directors and shareholders unanimously passed resolutions for the winding-up of Robor. The South Gauteng High Court granted the order of liquidation of Robor at the end of last month.

In June, Tiso Blackstar signed an agreement to sell its South African media, broadcasting and content businesses to Lebashe Investment Group for R800m. The sale would exclude Gallo and its South African radio assets, but includes publications like the Sunday Times, Business Day and Financial Mail. 

Compiled by Helena Wasserman