24 August 2014

Tanzania: Steel Metals Expansion Set to Improve the Industry

LAST Sunday, the local iron sub-sector saw Kamal Steels Limited inaugurate a 320bn/- expansion of its plant located at Chang'ombe area in Dar es Salaam. Our Correspondent looks at the expansion drive and how the construction industry in Tanzania and East Africa is set to benefit once the exercise is completed...

THE construction industry in Tanzania has of recent years seen growing steadily, yet contributing significantly to the national income by 8.3 per cent in 2013.

The industry's encouraging growth rate and its good contribution to the national income was an outcome of superb performance of iron sub-sector whose materials are great in demand in construction.

The Prime Minister, Mr Mizengo Peter Pinda said in Dar es Salaam recently when launching the start of expanding the Kamal new plant at Kamal Steels Limited that the government welcomes huge investments in steel metals to boost the construction industry in the country.

"In recent years, the sector's contribution to the national income has been growing from 7.8 per cent in 2005 to 8.3 per cent 2013," Mr Pinda said, adding that it was an encouraging growth.

According to the premier, the industry's growth and development rate sharply increased from 7.8 per cent in 2012 to 8.6 per cent.

Mr Pinda praised the Kamal Steels Limited for its right decision to expand the plant, calling also for other manufacturers of steel metals to increase their production to meet the market demand.

The premier said he was happy to be informed by the plant management that once the expansion exercise completed, the plant would be capable of producing 80,000,000 tonnes per annum from the current 10,000 tonnes.

He said the iron sub-sector was of paramount significance in the fast growing construction industry and other allied sectors since its products are in great demand in the area.

"The construction industry in country has been growing very fast and the government will continue to create conducive environment for the subsector to grow and play its part in the national economy," he said, noting that all the products produced must meet international standards.

Mr Pinda whose office is also responsible for investment and facilitation, used the occasion to remind manufacturers in the country to produce goods of highest quality meeting the international British set standards of BS 460.

"We don't compromise on issues related to quality and I appeal to all manufacturers to ensure products made locally meet the required international standards and compete in global markets," he said. He said the plant expansion apart from stimulating growth and development of the construction industry, the plant will also contribute dearly into government's coffers in terms of taxes.

"The expansion will give room for more job creation where Tanzanians will benefit from it," he said, insisting that the plant will be largest in East African countries.

The premier said the National Development Vision 2025 indicates that the industrial sector particularly the iron sub-sector is an engine towards reaching the desired goals.

He the impressive growth of construction industry of 8.6 per cent could easily be translated into the growing demand of its products in the market.

Welcoming Premier Pinda, the Deputy Minister of Industry and Trade, Ms Janet Mbene, said the expansion of the plant was in line with a strategy of her ministry to create a strong based-economy using locally made products.

Ms Mbene said that completion of the plant be meant a lot for the sub-sector in the country where the current demand of iron steels stands at 300,000 tonnes. "We (the ministry) support these efforts of Kamal Steels Limited and we take this opportunity to invite more investors to inject more capital in the sector whose future is very bright," she noted.

She said the plant's expansion was a result of her ministry's decision to ban exports of scrap metals to stimulate local production by enabling the availability of local raw materials.

However, to justify the government's commitment to protect local industry and see it growing, deputy minister Mbene said in 2005 there were only five steel metal plants in the country, but now due to good investment policies the plants have increased to current 15.

"The investment of 200 million US Dollars in the plant is huge and would stimulate production that is likely to surpass the local demands of 300,000 tonnes of metal steel," she added.

She said the Kamal Steels Limited's expansion was a testimony that it was committed to be the leading company in producing steel metals in East and central Africa.

Ms Mbene also commended the company for being one of the largest taxpayers in the country for instance in 2013/2014, the company contributed 2bn/- into government coffers.

Earlier, the Prime Minister, the Group Chairman and Managing Director, Mr Gagan Gupta said for the last ten years, the factory has emerged to be the manufacturer of good quality steel bars and angles of British standard.

"We deeply focus on the quality of our products which has been proven by various test results carried out frequently by various regulators," Mr Gupta said. According to Mr Gupta, Kamal Steels Limited, has always provided good quality and above standard products through which was able to get supply orders to big projects.

"We at Kamal Steels believe that steel is not only steel, but is the shield to the lives of the people who reside within its shelter. Therefore, we can never compromise with the quality of our products," he stressed. He said while in market, Kamal Steels limited, has been facing a number of challenges regarding the quality of steel in Tanzania.

"We have been trying to discuss with Tanzania Bureau of Standards (TBS) to establish minimum standard requirement of BS 460 for steel products in Tanzania," Mr Gagan said, adding that the East African Community and Kenyan Authority have already adopted the minimum standard of BS 400 while TBS still uses the old system of 350.

Mr Gupta who also commended the Premier's budget speech in the last Parliamentary Session, saying it really emphasized the need to strengthen the industrial growth in Tanzania.

"We were pleased to note that there were discussions to impose import duty on steel to provide support to the local manufacturers and industry" the chairman explained.

He said it was a good towards protecting the local industries to grow and compete in both local and global markets. However, no duty was imposed on imported steel in Tanzania.

"If such a situation is allowed to continue, it could seriously affect the local steel producing industries and eventually lead to closing a number of them, if not all," he said. The Kamal Steels Limited has employed about 300 people and embarks on producing reinforced b

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