Robor goes into liquidation
Steel tube and pipe manufacturer Robor has been placed into voluntary liquidation.
Investment holding company Tiso Blackstar, which owns 47.61% of Robor, reported earlier this month that the decline of the South African economy over the past three years, the margin-eroding effect of cheaper Chinese imports, delays in the signing of power purchase agreements with independent power producers and the financial difficulties faced by power utility Eskom had “caused systemic harm” to production and revenue generation in South Africa’s steel tube and pipe manufacturing sector.
It added that the “progressive demise” of Robor’s business had been further exacerbated by insufficient volumes as a result of excess production capacity in South Africa after 2010 and the pervasive effect of cheaper imports from the East; the imposition of import duties by the US on imported steel, which plagued Robor’s sales of specialised steel pipe into the US oil and gas industry; the effective cessation of Eskom’s planned 5 000 km investment in additional power transmission lines; and the South African government not extending import duty and tariff protection to downstream industries, “thereby exposing steel fabricators to too huge margin erosion to compete with imported steel-manufactured goods”.
Despite efforts by Robor’s management to rightsize the operations, to procure additional tonnages for its manufacturing facility and to source additional capital, Robor became increasingly unable to maintain the required levels of working capital and liquidity to retain its going concern status.
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