Commercial Projects
Devki Group Unveils Sh30bn Virgin Steel Factory in Kwale
The new factory can produce up to one million tonnes of steel.
Devki Steel Mills Ltd has unveiled a Sh30 billion raw steel production factory in Kwale County in a move that will give local manufacturers access to cheaper industrial steel.
The facility, which is located at Samburu in Kinango constituency, is the region’s first virgin steel production plant that utilises locally sourced iron ore.
Devki Group chairman Narendra Raval said the factory – which will be launched today by President William Ruto – is a game changer for East African nations that have been net importers of raw steel.
“Only South Africa has an industrial raw steel production plant and we plan to give Kenya steel products manufacturers cheaper access to industrial raw steel,” he said.
500,000 tonnes
The plant will have 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 rely on industrial steel products imports [mainly from South Africa and China] as well as scrap metal to manufacture TMT bars, steel tubes, angles bars, barbed wire nails among others,” Mr Raval said.
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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.
“This plant is something we should celebrate, not just as Kenyans, but as the region…It has put Kenya on the world map as a country producing virgin steel,” Mr Raval added.
The Kwale raw steel factory will operate blast furnace technology for main steel manufacturing using internally generated power supplemented by the supply from the national grid.
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Devki will generate electricity at Kabenderani to release 55MW of clean energy by tapping the heat released from its kilns in the factory for consumption on-site.
This will help the company to cut production costs since electricity is a major expense in the raw steel production process.
Covid-19 pandemic
Construction of the Kwale Devki steel factory has been underway for three and a half years owing to the disruption caused by the Covid-19 pandemic.
“The engineering works were a bit challenging. The funding has also been a challenge. The plant cost me $240 million (Sh30 billion), which is the biggest single investment in steel in Africa in two decades,” Mr Raval says.
CK understands that the International Finance Corporation (IFC), the World Bank’s private investment arm, injected Sh9.7 billion into the project, while Mr Raval – the majority shareholder – contributed Sh14.3 billion.
The factory is expected to create 2,500 jobs, 60% of which will be direct jobs.
“It has taken three-and-a-half years to complete the project but we are happy it is done,” Mr Raval said adding that the plant has been operational over the past two months on a trial basis.
The plant is expected to be operating at full capacity by March next year.
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