Posted on 01 Apr 2015
The Kenyan government has signed a memorandum of
understanding (MoU) with Chinese steel giant Sinosteel to develop a steel plant
in the country.
Cabinet Secretary (Minister) for Industrialisation and Enterprise Development,
Adan Mohamed, said at the signing ceremony in Beijing on Monday that
Sinosteel's experience in the sector would yield the desired outcome for the
project.
Sinosteel managing director Wang Jian said increasing regional demand for steel
products in light of growing infrastructure and real estate development meant
it was the right time for Kenya to prioritise the project.
Kenya has a demand of about 1.8 million tonnes of steel annually as at the end
of 2013. Demand is forecast to grow to 2.5 million tonnes by 2020 and double
that number by 2030.
The ongoing real estate boom, standard gauge railway project construction,
Lappset Corridor project and 10,000-km of new road network project provide an
excellent off-take for steel and steel products.
Mohamed said regional demand amplifies this further with expected investment in
regional infrastructure projects running into billions of dollars in the next
three to years.
"Iinvestment in a steel plant in Kenya will significantly improve our trade
balance and foreign reserve position given the significant consumption of
resources in import of steel products," he said.
"Exploration of iron ore and coal deposits are already at an advanced
stage, and Sinosteel's expertise in the sector is expected to fast track its
implementation," he added.
