M a r k e t N e w s

East Africa: Proposed steel plant for renewed Industrial growth

Posted on : Wednesday, 7th January 2015

 The plant, which will have the capacity to produce 157,000 tonnes of steel products each year, is expected to go a long way in providing affordable raw materials for the country’s growing construction industry.

Top Steel Kenya Limited is the company behind the plans for setting up the multi-billion shilling facility in Mwavumbo area of Kwale County and is in the process of seeking approval from relevant regulators.
According to regulatory filings by Top Steel Kenya Ltd, the facility will manufacture Thermo-Mechanically Treated bars (TMT) known as Top TMT. “The steel mill will operate a light and medium structural mill with an installed capacity of 20,000 tonnes per year as well as a tube mill plant with an installed capacity of 12,000 tonnes per year,” read the filings in part. Currently, Kenya does not produce engineering grade steel despite the capacity to do so and has to rely on importation.
Final cost
The country needs about 1.2 million metric tonnes per year of steel but is only capable of smelting about 40 per cent of that locally. The balance is imported from China with the transportation costs adding heavily onto the final cost of the product making the cost of construction and manufacturing steep.
The construction of the standard gauge railway, the LAPSSET project and several energy and infrastructure projects have drastically increased the demand for steel making the product more expensive having a knock-on effect on the overall cost of building and construction.
The entry of Top Steel Kenya Limited is further set to stoke competition with existing Kenyan steel manufacturers including Athi River Steel, Devki Steel Mills, Brollo Kenya and Simba Products among others.
Meanwhile, the revival of Kenya’s State-owned Numerical Machining Complex (NMC) which was touted to reduce the cost of doing business in the country has remained in limbo for over two years now.
In the 2014/2015 budget, National Treasury Cabinet Secretary Henry Rotich said NMC would benefit from a Sh3 billion stimulus package meant to revive local industries.
Import levy
The Government followed up this incentive by imposing an import levy of between 15 and 25 per cent for steel and iron imports respectively in order to encourage the procurement of the products from local industries.
Besides creating employment for thousands of graduates from the country’s technical institutions, NMC was expected to lower the cost of engineering grade steel and cut the country’s reliance on imports.

Source : in2eastafrica.net
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