Devki Steel Mills in Samburu, Kwale County has recorded a surge of demand for steel from the East African region that it says will boost its operation to hit 100 percent in the next three months.
Devki Group chairman Narendra Raval said new orders from Tanzania and Uganda will prompt the company to speed up its production process.
“Since we officially opened our doors in November last year, we have been receiving orders within the country due to our cheaper steel products. Since then, we have been operating at 60 percent but with new orders from Tanzania and Uganda, we have to operate at 100 percent by October this year,” said Mr Raval.
Mr Raval said the use of new technology and conversion of heat produced to electricity have enabled the company to produce low-price steel products.
“The technology we use makes the company the region’s first virgin steel production plant that utilises locally sourced iron ore,” said Mr Raval
To deal with the high cost of electricity, Mr Raval said the company has begun to produce its own power to run its plant.
“The plant which operates about 80 percent is cutting its cost by producing 55 megawatts of clean energy by tapping heat released from their kilns to run its company,” said Mr Raval.
The factory which was launched by President William Ruto in November last year has turned out to be a game changer for East African nations that have been net importers of raw steel.
The plant has the capacity to produce 500,000 tonnes of steel, which Devki hopes will help Kenya avoid the importation of industrial steel products for the production of products such as billets, wire rods, and TMT bars.
Kenyan steel factories have been relying on industrial steel products imports mainly from South Africa and China.
East Africa consumes less than 500,000 tonnes of raw steel per year, which means Devki Steel Mills can single-handedly meet the regional demand for the commodity.
Imports of iron and steel have risen steadily in the past five years, with a compounded annual growth rate of 10.9 percent from 1.63 million metric tonnes in 2017 to 2.47 million in 2021, according to data from Kenya Ports Authority (KPA).
In 2021, Kenya imported iron and steel worth Sh341.6 billion from China alone which is attributed to the increasing number of massive infrastructure developments being undertaken by Chinese contractors which has led to an increased demand for the commodity.
Other countries where East African states import iron and steel through Mombasa port include South Africa, Japan and India.
With the increasing demand for steel products, Devki expects to increase its employment portfolio from 10,000 to 20,000 in 2027.
