Turkish steel makers seek share in Kenyan market

• Buoyed by prospects of growing consumption of steel in the decade-long Kenya construction boom, the manufacturers’ representatives have pitched tent in the country hoping to land big ticket infrastructure projects and engaging new importers.
• The slowdown in steel consumption has also been noted in the local market, at least in the eight months to August.
• Total steel imports from Turkey dropped by more than half to 28,000 tonnes in the period owing to a decline in the construction sector following a hike in interest rates since the last quarter of 2011 which has discouraged fresh bank borrowing.  

Turkish steel makers are seeking a larger share of the local market following shrinking demand from their traditional European Union markets, where the construction sector has taken a hit from the credit crisis.

Buoyed by prospects of growing consumption of steel in the decade-long Kenya construction boom, the manufacturers’ representatives have pitched tent in the country hoping to land big ticket infrastructure projects and engaging new importers.

Namik Ekinci, who is heading a 25-member delegation, says that Kenya holds huge potential as a steel consumer owing to the level of new construction amidst shifts in the international markets where demand has ‘significantly’ slowed down.

“Kenya is potentially a very big market for our steel because of the huge development projects,” said Mr Ekinci. “European market is practically gone.”
Official date indicates Kenya imported about 866,000 metric tonnes of steel in 2011, with over 70,000 tonnes being sourced from Turkey—representing eight per cent.

Mr Ekinci anticipates that the local market could shore up sales for the Turkish steel manufacturers, whose export business dealt a major blow by the credit crisis in the European countries, previously its main market.

But the slowdown in steel consumption has also been noted in the local market, at least in the eight months to August. Total steel imports from Turkey dropped by more than half to 28,000 tonnes in the period owing to a decline in the construction sector following a hike in interest rates since the last quarter of 2011 which has discouraged fresh bank borrowing.  

“We expect that the drop is only due to short-term shocks,” said Mr Ekinci, projecting that sales will pick up after the trade fair. Narendra Raval, the managing director of Devki Steel, reckons that the demand for steel has dropped by about a fifth this year, compared to last year.