According to the Namik Ekinci, chairman of the Turkish Steel Exporters Association, Kenya holds huge potential as a steel consumer thanks to the booming construction industry.
“Kenya is potentially a very big market for our steel because of the huge development projects,” said Mr Ekinci.
Data from the Kenya National Bureau of Statistics indicate that Kenya imported about 866,000 metric tonnes of steel last year, with over 70,000 tonnes (8 per cent) being sourced from Turkey.
“The Kenyan construction sector could shore up sales for Turkish steel makers, whose export business has been hit by the credit crisis in European countries,” Mr Ekinci said.
Turkey is Europe’s second largest crude steel producer and the tenth largest in the world.
The local demand for steel has grown steadily buoyed by the boom in infrastructure and housing sector, while the production has been negligible over the past five years with imports plugging the huge deficit.
The high demand for the steel has seen a sharp rise in prices of the metal locally, where the cost of twisted steel bars and universal beams used to make reinforcement frames for storey buildings has rose by 25 per cent to Sh120 per kilogram from Sh96 in May.
However, a decline in the local construction industry following a hike in interest rates since October 2011 has resulted in a huge slowdown in steel consumption. Official data shows that steel imports from Turkey fell by more than half from January to August this year.
Analysts expect the sales to pick up following the Central Bank of Kenya’s (CBK) decision to lower the base rate to 13 per cent from 16.5 per cent earlier in the month.