Steel Manufacturers Push for Lower Production Costs to Boost Kenya’s Competitiveness

By Our Reporter Maurice Momanyi

Steel manufacturers have urged the government to lower production costs, strengthen the fight against substandard imports and create a stable policy environment to unlock the full potential of Kenya’s steel industry.

The call was made during the opening of the two-day East African Steel Summit at the Sarit Centre in Nairobi, where industry players said addressing these challenges would enable local manufacturers to increase production, reduce reliance on imports and compete effectively in regional and global markets.

Kenya Association of Manufacturers (KAM) Chief Executive Tobias Alando said the country’s steel industry has evolved significantly since 1948, growing from the production of nails into a diversified sector manufacturing hot and cold rolled steel, wire products, tubes, pipes, fabricated steel and aluminium products.

He noted that the industry contributes about 13 per cent of Kenya’s manufacturing sector and generates approximately KSh34 billion in taxes annually. However, despite having an installed production capacity of 4.2 million tonnes, the sector is currently operating at only 36 per cent of its capacity.

According to Alando, Kenya imported about 1.66 million tonnes of iron and steel products in 2025 while exporting only around 197,000 tonnes, attributing the low capacity utilisation to high production costs, expensive raw materials, declining exports, cheap imports and unpredictable tax policies.

“Despite the capacity we have built over the years, Kenya continues to import substantial volumes of steel products. This presents an opportunity to expand local production, deepen value addition, strengthen local supply chains and reduce our dependence on imports,” Alando said.

He added that a strong steel industry is critical to Kenya’s industrialisation agenda because it supports key sectors such as construction, transport, energy and manufacturing.

With the government investing heavily in affordable housing, roads, railways, ports, industrial parks and energy projects, demand for steel is expected to rise significantly. Manufacturers also stand to benefit from expanded market access through the African Continental Free Trade Area (AfCFTA), COMESA and the Kenya-European Union Economic Partnership Agreement.

However, Alando warned that the industry would only capitalise on these opportunities if longstanding challenges are addressed.

“High energy costs, substandard and illicit products, regulatory unpredictability, limited access to affordable financing and increasing pressure from low-cost imports continue to constrain the growth of our industry. Addressing these challenges requires government, industry, financial institutions and development partners to work together,” he said.

KAM Metal and Allied Sector Chairman Bobby Johnson said the steel industry’s growth is directly linked to East Africa’s infrastructure and industrial development.

“Every home, every kilometre of road and rail, every hospital and school being built today depends on the work of this industry. As investment in affordable housing, transport, energy and other infrastructure grows, our manufacturers are ready to meet this demand and realise the full potential of the steel sector,” Johnson said.

He also called for stricter enforcement of quality standards and greater cooperation among East African Community member states to curb the influx of substandard steel products.

“The people who live in the homes we build, use our roads and work in our buildings trust that the steel used in those structures meets the required standards. We must protect that trust through harmonised standards that are fairly and consistently enforced across the East African Community,” he added.

The summit, organised by the Kenya Association of Manufacturers in partnership with Steel Giant, has attracted more than 400 delegates and exhibitors, including manufacturers, processors, traders, policymakers, financiers and technology providers. Participants are expected to discuss the future of steel production, trade, investment, technology and sustainability in East Africa.