Steel supply deal marks a turning point for firms

Nicholas Ngetich assist in controlling a metal that is being used for construction of a storied house at Maziwa road in Kakamega by Zenith Steel Fabricators Ltd. [Photo: Duncan Ocholla/Standard]

Local steel manufacturers have got a boost after global suppliers agreed to consistently supply them with the right raw materials on time to power Kenya’s industrial base.

It will also promote President Uhuru Kenyatta’s job creation plan. Erratic supply of billets, wire rolls and hot-rolled coils has been one the reasons most steel plants have been operating at below capacity, with most forced to shed jobs as a result.

However, suppliers drawn from 15 countries last week promised a steady supply of the materials. This was during the International Steel Forum in Nairobi on Friday.

“The suppliers agreed to comply with local requirements to ensure good quality local materials are supplied,” said Bobby Johnson, the chairman of the metal sector at the Kenya Association of Manufacturers. The steel sector in Kenya employs 22,100 directly and another 75,000 indirectly, figures that President Kenyatta would like to see go up as part of his Big Four Agenda. 

According to the Ministry of Industrialisation projection, a single steel plant of a capacity to produce 350,000 tonnes of steel per year can generate over 10,000 jobs. It is estimated that the country spends over Sh60 billion shillings annually on importation of steel.

Direct and indirect consumption of steel in Kenya is also projected to increase as the country embarks on the development activities as envisioned in the Vision 2030 such as Lamu port development, railway and roads and housing projects among others.

The forum focused on providing partnership opportunities to boost the sector’s competitiveness and developing frameworks of collaboration across the industry. It was attended by 187 delegates.

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Metalwork is one of the sectors that President Kenyatta has targeted in his bid to create jobs by revamping the manufacturing sector.

The State is targeting Sh1 billion of investments into the iron and steel sector as part of its plans to increase the share of manufacturing to 15 per cent of the Gross Domestic Product.  

Mr Johnson noted that the support of the Government in protecting local industries has boosted local production.

National Treasury in the current financial year sought to protect the sector by slapping cheap imported finished iron and steel products with high import taxes.

KAM Chair Sachen Gudka said the establishment of stronger partnerships with global investors, would be vital to attain the desired growth in the sector and the economy. “The future of the sector looks at the development of Smart Infrastructure. Through data and employment of sustainable strategies the sector will spur the productivity of the country and the continent for the next generation,” said Gudka at the event.

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Local steel manufacturersPresident Uhuru KenyattaInternational Steel ForumSteel manufacturing