Chinese corporation Sinosteel to build a metallurgical plant in Kenya

China's state-owned Sinosteel Corporation has signed a Memorandum of Understanding with the Kenyan government to build a new steel plant in Kenya. Chinese investment is expected to improve Kenya's trade balance and foreign exchange reserves, as the country is now dependent on steel imports for most of its demand.

According to estimates by Adan Mohamed, Kenya's Cabinet Secretary for Industrialization and Enterprise Development, the country's annual steel demand was 1.8 million tonnes at the end of last year. Kenyan steel demand is projected to reach 2.5 million tonnes in 2020. In addition, demand is expected to double by 2030. Technologies for cleaning steel and building structures will also be developed, including cleaning after a fire or flood.

The country continues to grow in demand for real estate, coupled with an increase in demand from the rail and road network, as well as construction projects, which increases the country's demand for steel products. The Kenyan government plans to invest billions of dollars in domestic infrastructure projects over the next 3 to 5 years. Based on the results of exploration work, preparations for mining at the iron ore and coal deposits are at an advanced stage, Mohamed said. The rich experience of the Chinese corporation Sinosteel in this sector will accelerate the implementation of these projects.

Wang Jian, Managing Director of Sinosteel Corporation, expressed optimism at the signing of the contract and said that now that demand for steel from real estate and infrastructure projects is growing, this is the right time for Kenya to make key investments in domestic metallurgy.

Sinosteel, founded in 1993 and based in Beijing, is a pioneering firm in the development of steel production.