NAIROBI, Kenya, Mar 30- A Chinese company, Sinosteel has announced plans to develop a multi-billion shillings steel plant in Kenya.
This follows a Memorandum of Understanding (MoU) signed between the Kenyan government and the company.
“I am confident that Sinosteel’s experience in the steel sector will yield the desired outcome for the project,” Industrialization Cabinet Secretary Adan Mohamed said during the signing ceremony in Beijing, China.
In 2013, Kenya had annual demand of about 1.8 million metric tonnes of steel with this demand expected to grow to 2.5 million metric tonnes by 2020 and double that number by 2030.
This growth is expected to be contributed by the on-going real estate boom, the Standard Gauge Railway project, construction on the Lamu Port South Sudan Transport Corridor project and the 10,000km new road network that is a flagship of the Jubilee government.
“The regional demand amplifies this further with expected investment in regional infrastructure projects running into billions of dollars in the next three to five years,” Mohamed noted.
Sinosteel’s Managing Director Wang Jian noted that the move will significantly improve trade balance and foreign reserve position given the huge consumption of resources in import of steel products.
“Increasing regional demand for steel products in light of the growing infrastructure and real estate development is making it appropriate timing for Kenya in prioritizing the steel mill project,” Wang said.
According to Mohamed, exploration of Iron ore and coal deposits which are critical raw materials for steel production, are already at an advanced stage with government and Sinosteel’s expertise in the sector expected to fast-track its implementation.