A Mombasa family has invested KES 1.3 billion in a new steel mill that is set to boost production of the metal in Kenya.

Tarmal Wire Products, which is owned by three brothers, switched on the new steel mill late last year, marking a significant milestone for a firm that started as a hardware shop 25 years ago. Mr Noraali Tarmal his brothers Mr Murtaza Tarmal and Mr Mukarram Tarmal, are partners and co directors in the company.

Mr Noraali Tarmal chairman of Tarmal Wire Products said that the Mazeras based firm has a capacity to produce 84,000 tonnes of steel per annum.

He said that "We invested in this industry because we realized the demand is far much higher than supply. We will be one of the biggest when we hit full production capacity."

Mr Noraali Tarmal said that his firm is studying feasibility of constructing a one million tonnes steel factory to tap the Western Kenya iron ore deposits.

Kenya's annual demand for steel is estimated at about 480,000 tonnes to 600,000 tonnes, about a tenth of which is imported mainly from South Africa. Other big names in the steel industry include Mabati Rolling Mills, Devki Group, Insteel, Kikuyu Rolling Mills and Morris and Company.

According to the latest economic survey figures by the Kenya National Bureau of Statistics, the iron and steel imports have nearly doubled from KES 3.7 billion in 2003 to KES 5.2 billion as at 2009. The high growth in demand for steel products in the region has seen a proliferation of small steel mills in the past 10 years.

Discovery of huge iron ore deposits in Western Kenya has also prompted the government to encourage industrialists to put up big steel industries to tap the raw material.

Kenya imports an estimated 20,000 tonnes of iron ore per month from South Africa, China, India and Korea. This exposes the industry to foreign exchange risks.

(Sourced from www.businessdailyafrica.com)