Bangladeshi steel maker to open Sh6.5bn factory
Posted on : Wednesday, 26th December 2018
Big ticket infrastructural projects including the multi-billion Standard Gauge Railway (SGR) have driven up demand for steel products in the country.
One of the largest steel makers in Bangladesh is set to open a Sh6.5 billion ($65 million) factory in Kenya.
Bangladesh Steel Re-Rolling Mills Ltd (BSRM) announced the local venture to be known as BMS Steel Limited.
It is backed by a consortium of unnamed Kenyan, Mauritian and UAE investors.
The plant will have a production capacity of 400 metric tonnes of steel a day.
“The company has informed that the board of directors has decided to make equity investment of Tk. 39.00 crore (approximately) equivalent to $4.67 million (representing 18 per cent) in BMS Steel Limited a new joint venture company, formed in Kenya along with investment partners from Mauritius and United Arab Emirates,” said the Dhaka Stock Exchange-listed steel firm in a local regulatory notice.
The exact location of the plant is however not disclosed.
“The investment partners have operations in Kenya and other countries in Africa. BMS Steel Limited will set up a manufacturing facility with total investment of about $65 million to produce 0.40 million metric tonnes BMS bars and sections per year.”
The new entrant is expected to take the battle for local production and sale of steel products to local players’ doorsteps.
Big ticket infrastructural projects including the multi-billion Standard Gauge Railway (SGR) have driven up demand for steel products in the country. Local steel manufacturers include family-owned construction materials manufacturer Devki Group, Kilifi-based Jumbo Steel Mills, Nairobi based Tononoka Steel, Apex Steel Mill Corporation, Steel Makers Ltd and Prime Steel Ltd.
In August this year, Jumbo Steel Mills completed construction of a Sh1 billion factory that was expected to create more than 500 direct jobs for locals of Kilifi’s Rabai sub-county.
Managing director Indravadan Patel said then the facility would produce 150 metric tonnes of steel a day. Earlier in July this year, Devki Group said it plans to inject Sh45.5 billion in the region’s first raw steel production plant, seeking to exploit locally sourced iron ore.
Kenyan steel factories rely on industrial steel imports as well as scrap metal to manufacture TMT bars, steel tubes, angles bars and barbed wire nails among others.
