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Manufacturers to reap big as Chinese firm buys steel worth Sh330m from Kenya

By Standard Correspondent | April 28th 2015
By Standard Correspondent | April 28th 2015
A section of the Standard Gauge Railway line at Mtito Andei in Makueni County. (Photo:File/Standard)

NAIROBI: China Road and Bridge Corporation (CRBC) is in the process of buying over 5,000 tonnes of steel worth more than Sh330 million from local manufacturers for the construction of the Standard Gauge Railway.

This will be the first large-scale local purchase of steel by CRBC since construction of the new railway began. The firm has previously purchased smaller consignments from different Kenyan steel makers. CRBC said the 5,250 tonnes (5,250,000kg) of steel bars are expected to meet requirements for construction of culverts and bridges foundation for about three months.

Five steel manufacturers on Friday presented their bids to supply the steel bars to CRBC at the firm's offices in Nairobi. The firm will select one or more suppliers from their pre-qualified list of suppliers.

"We have tested suppliers' steel products that are participating in this process in our SGR Project centre lab and they have met the requirements for the project," James Chen, the firm's business manager at the Department for External Relations and Co-operation said. CRBC will now evaluate the quotations and will select a suitable supplier based on the stability of their production capacity, good sales performance, excellent quality control and lower price variations.

"After this meeting, CRBC will evaluate the tenderers' business, service ability, quality and price stated in the bidding document. Eventually, one or several suppliers will be awarded the tender," said Chen.

The companies that presented their bids are Apex Steel Mill Corporation, Steel Makers Limited, Devki Steel Mills, Prime Steel Ltd and Tononoka Steel.

The companies said the local steel industry has adequate capacity to provide steel for the construction of the new railway while at the same time continuing regular supply to other local steel intensive industries.

Senior officials from the steel manufacturers, speaking at the Friday meet, also allayed fears of shortage or spikes in the prices of steel during the SGR project construction phase. They noted the industry has in the past supplied steel to other mega projects in the country and East African region while at the same time servicing other local industries.

The 5,000 tonnes of steel are expected to meet demand for steel for a period of about three months. CRBC expects to undertake another round of procurement for steel towards end of this year.

Mr Chen added the firm was keen on buying most of the materials used in the SGR project locally. Sourcing within Kenya has the benefits of supplying materials to the contractor in a fast and efficient manner and at the same time contributing towards the growth of local Kenyan businesses.

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