Steel Manufacturing in Uganda: An Overview by Nilax Bhatt of Steel and Tube Industries

Nilax Bhatt, Executive Director at Steel & Tube Industries Ltd (STIL), shares his assessment of the steel manufacturing sector in Uganda.

Nilax Bhatt, Executive Director at Steel & Tube Industries Ltd (STIL), shares his assessment of the steel manufacturing sector in Uganda.

“We are in the manufacturing of steel. The sector can be divided into three main sections: the first is downstream, then midstream, and finally upstream. The downstream investment is sufficient or more than sufficient to what the country can absorb currently. Our estimation is almost $600 million worth of investment. This is one of the leading sectors of the Ugandan economy. Downstream is making the final products and distributing them to the people directly. Midstream is between downstream and upstream. Upstream is the iron ore mining and actually getting something from the ground. Midstream and upstream have very limited investment. If that vacuum is filled, it can change the economy of the country. As of now, the downstream market is quite crowded and very dependent on importation. All midstream and upstream products are sent outside of the East African region”, says Nilax Bhatt.

“There are companies who can come to fill that gap provided some infrastructure challenges are met. In Uganda, the iron ore content being mined is one of the best. It ranges from 60 to 80% which is quite good quality iron. The problem is that we do not have a reducing agent, coal, or we need a gas, which is more advanced technology. Bringing coal up here has its own implications in terms of cost. Bringing gas requires pipelines which is a government infrastructure issue. The way the government has focused on the oil sector by building refineries and crude oil pipelines is the same focus which we hope will now be taken for the NDP3 which is the next five-year project for the government. They have factored iron and steel into that plan and that is where we are more hopeful of getting that vacuum filled. Many downstream companies who are big manufacturers and players also intend to participate in the midstream and upstream. It is creating the development that is needed. That vacuum provides a lot of opportunity for the players who are in the downstream and at the same time for the economy of Uganda by adding much more value within the economy than depending on outside and sending the forex out of the country”, he adds.


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