A row is simmering among manufacturers of steel over imports of raw materials.
On strict call of anonymity, some industry players wrote to Cofek protesting the Devki Steel Mills Ltd letter dated September 29, 2021 and addressed to the CEO, Kenya Association of Manufacturers (KAM).
The letter was signed by Devki Mills Commercial Director Lokesh Kumar.
Devki has invested huge amounts of money in a mega integrated steel plant at Samburu, Kwale County. The firm will process from raw iron ore to finished steel products.
The plant is expected to have a capacity of a million tonnes per annum. It will substitute the import of billets , wire rods, silico manganese and ferro silicon.
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In essence, Devki Mills wants KAM to push for a position that will technically lock out import of steel raw materials – by making it expensive to source from overseas other than from themselves.
Aggrieved, industry players are up in arms against the proposal – which is yet to be adopted by KAM. They wrote the following petition;
‘An attempt to monopolize the entire value chain by one business by blocking imports and increasing locally available raw materials is in the offing.
‘Devki steel is known for predatory business practices that only end up hurting the end consumer in terms of exorbitant prices. The proposal to KAM, if successful, will see steel prices increase by 50 percent locally, making it expensive in the entire region unlike Uganda and Tanzania, similar to what is happening to petrol.
‘Through Cofek, we urge you as consumers that the proposal does not auger well since it will lead to closure of numerous small and medium industries that rely on imported raw materials for local manufacture, the proposed measures will make construction materials out of reach of common people, strengthen one player, encourage monopolistic tendencies, countless job losses and industry closures’.
Attempts to speak to Devki Chairman Narendra Raval (pictured) and CEO Kaushik Pandit were unsuccessful.
Cofek has written to the Competition Authority of Kenya to review the proposal and advise accordingly.
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