As she prepares to vacate the ArcelorMittal South Africa CEO post, Nonkululeko Nyembezi-Heita should be able to walk into another blue chip executive post following a grueling six years at the helm of the JSE listed steel giant.
ArcelorMittal SA announced this week that Nyembezi-Heita has resigned and will vacate the CEO post on the 18th of February 2014. News came yesterday that she has been appointed non-executive chairperson of the JSE Limited board which will add gravitas to her already impressive resume. She has served on the JSE board from 2009 as an independent non executive director.
Armed with, BSc (Hons) (Elec Eng), MSc (Elec Eng) and an MBA, Nyembezi-Heita came to ArcelorMittal in 2008. She was from Vodacom where she served as Chief Officer of Mergers & Acquisitions.
The share price of ArcelorMittal tanked by 4.03% or 166c to close at R39.53 yesterday, a day after Nyembezi-Heita’s resignation was announced. This may be seen as an expression of confidence in Nyembezi-Heita.
ArcelorMittal SA chairperson Mpho Makwana said Nyembezi-Heita has made a “tremendous contribution to the Company during an exceptionally challenging period not only for the Company, but the steel industry generally.”
With the word challenging as a reference point, Makwana’s observation is an understatement.
Nyembezi-Heita took the CEO post at ArcelorMittal SA, former Iscor which became a subsidiary of global steel manufacturer ArcelorMittal, at a critical time. In 2006 she came face to face with heavy legacy issues, things which were left hanging when global steel magnate, Lakshmi Mittal, swooped on Iscor in 2003. Key among these legacy issues was the pricing matter which has caused relations between Iscor and the South African government to sour.
When the South African government handed over control of Iscor to Mittal there was talk, almost an understanding that the company will conclude a BEE deal. It never happened and the matter exploded under huge politics.
Nyembezi-Heita also faced a significant challenge from evolving environmental dynamics. It would seem ArcelorMittal entered the 2000’s completely unprepared for the green revolution and had to make major adjustments under the direction of Nyembezi-Heita.
Lately the company had to deal with huge input cost pressures largely due to two factors, the sky rocketing cost of electricity and a significant rise in the cost of a key input iron ore. ArcelorMittal was built and developed on the back of cheap electricity and iron ore. A rapid upward turn of these key inputs posed a significant challenge. ArcelorMittal lost its rights to cheap iron supply from Sishen mine in the Northern Cape due to a shift in regulation and attendant ambiguities. Some say the steel company went to sleep and temporarily lost the Sishen rights to an Anglo American subsidiary Kumba Iron Ore. The matter was resolved last month with ArcelorMittal regaining a relatively favourable supply arrangement with Kumba. This is after securing a favourable court pronouncement.
The resolution of the iron ore supply matter may have given Nyembezi-Heita a good reason to pause and reconsider her future. It would have been a black mark on her resume, had she left the matter hanging.
You get that sense in the emphasis of the matter from the ArcelorMittal SA statement issued yesterday.
Nyembezi-Heita is quoted saying “Although challenging, over the last six years as a management team, we have achieved significant advances in a number of areas. Our safety performance is now world-class and we have also taken huge strides towards meeting our environmental obligations. There is steady progress in our operational improvement programmes with pleasing results in places. As the market turns, we can expect a marked improvement in our financial performance, aided in no small measure by the recent settlement with Kumba.”
Makwana said Nyembezi-Heita lives the company “in a considerably better position than when Ms Nyembezi-Heita joined the group six years ago.”
“On behalf of the Board of ArcelorMittal South Africa and the ArcelorMittal Group, we express our thanks for her unstinting dedication, guidance as well as her calm and determined leadership.”
Makwana said the Board will embark on a search for Ms Nyembezi-Heita’s successor and an announcement on the transitional period will be made in due course.
It is difficult to think of another post which will be as challenging as ArcelorMittal for Nyembezi-Heita.