Devki, Tononoka in race to supply Sh300m SGR steel

What you need to know:

China Road and Bridge Corporation (CRBC), doing the construction of the railway, said one or more firms will be awarded the tender set to be the first of two this year.
5,250 tonnes of steel bars are expected to meet requirements for the construction of culverts and bridges foundation for about three months.

Five Kenyan companies have submitted bids for a Sh300 million contract to supply steel to the standard gauge railway (SGR).

They are Apex Steel Mill Corporation, Steel Makers Ltd, Devki Steel Mills, Prime Steel Ltd and Tononoka Steel.

China Road and Bridge Corporation (CRBC), doing the construction of the railway, said one or more firms will be awarded the tender set to be the first of two this year.

It said this was the first major local steel supply contract at $3.7 million (Sh330 million). CRBC had previously bought smaller consignments from different Kenyan steel makers.

“CRBC will now evaluate the quotations and will select a suitable supplier based on the stability of their production capacity, good sales performance, excellent quality control and lower price variations,” said the company in the statement.

The 5,250 tonnes of steel bars are expected to meet requirements for the construction of culverts and bridges foundation for about three months.

“We have tested the steel suppliers’ products that are participating in this process in our SGR project centre lab and they have met the requirements for the project,” said James Chen, CRBC, business manager of department for external relations and cooperation for the SGR project.

Local companies say they have adequate capacity to provide steel for the construction of the new railway while continuing regular supply to other steel-intensive industries. However, this might push up the prices of the commodity due to the inability of the manufacturers to adjust production in the short run.

CRBC expects to buy more steel towards the end of this year. Mr Chen said the firm was keen on sourcing most of the material locally, noting that buying within Kenya is quicker and would contribute towards the growth of local businesses.

“Compared to international suppliers, local suppliers can supply materials more efficiently and timely, which is beneficial to material planning and inventory management. At the same time if the material is procured locally, we can avoid complicated import procedures and relieve the stress of transport,” said Mr Chen.