The acute demand for steel within the East African region and Africa at large is fast driving the necessity for set up and production of the product within the region.
Coupled with high duty charges and tariffs from other global source markets and occasional unpredictable supply shocks, the setting up of yet another Devki Mega Steel Manufacturing plant in Tororo, Uganda might just be the cure for high import bills of the crucial commodity.
According to World Steel Association analysis via Worldsteel Short Range Outlook, Africa’s steel demand has been growing with the report suggesting that Africa’s raw steel/semi-finished products market will grow at 2.2 per cent Compound Annual Growth Rate in volume until 2035.
“Africa’s steel market reached 39 million tonnes in 2024 and is projected to reach a demand of 52 million tonnes by 2034 driven by bolstering infrastructure and advancing industrialization. Our countries are well positioned to play in the regional and global steel market,” President William Ruto, who was present at the Sunday launch, explained.
Interestingly, East Africa is at the fore front of driving the demand in the market. For instance, Kenya’s drive for the construction of the affordable housing units has sharply driven demand for steel.
Likewise, with the joint Pamoja bid for co-hosting the 2027 Africa Cup of Nations (Afcon) by Kenya Uganda and Tanzania, renovation of stadia and other key sporting facilities have equally contributed to the demand.
With an investment of two trillion Uganda Shillings an equivalent of about 550 million US dollars, Devki hopes its 20th industrial investment in East Africa will tap into Uganda’s 500 million iron ore deposits to bolster East Africa’s production of steel.
Once completed, the project will bring Devki Group’s total East African investment to 1.1 billion dollars. Once completed, the steel plant will join the company’s cement subsidiary Simba Cement also in Tororo.
“This project will reduce the trade deficit of Uganda, by over a billion dollar by not importing the steel that is currently imported and also the exportation of over $4 billion per annum of unprocessed steel from Uganda to the neighbouring countries,” Narendra Raval, the chairman of Devki Group of Companies, said at the ground breaking ceremony in Tororo on Sunday.
“The steel which will be produced here will be done under blast furnace technology, the highest quality globally. There’s no other better technology to produce better steel in the world,” he added.
The investment hopes to reverse Uganda’s Ush 2 trillion or $840 million annual steel import budget. The plant is set to be the largest in Africa after the South African steel manufacturer ArcelorMittal announced winding down its long steel operations in Newcastle and the Vaal Triangle due to economic factors, increased imports, and high costs. It was previously the largest steel producer in sub-Saharan Africa and produced 2.8 million tonnes of liquid steel in 2023.
When operations begin, the facility will employ 15000 locals in steel mining, transportation and manufacturing.
“The United States, is a quarter of the land area Africa and their population is a fifth of what we have in Africa. Our wealth is $2.8 trillion, America’s wealth, is $30 trillion. That’s more than ten times bigger that Africa,” host President Yoweri Museveni told the audience.
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