Africa-Press – Tanzania. LOCAL steel and roofing iron sheet industries have claimed that fluctuating raw material costs at the international market is one of the key causes of the rise in steel prices, adding that the current scenario is beyond the control of steel producers.
Steel scrap prices on the international market nearly doubled in a single year, from June 2020 to June 2021. Steel costs on the international market have also been steadily rising.
According to Mr Ado Maimu, Managing Director of Ando Roofing Products Limited, the price of raw materials has grown by 50 per cent worldwide in a year due to the Covid-19 pandemic.
During a meeting between the Confederation of Industries (CTI) and the Minister for Industry and Trade, he stated that freight ships have increased about fourfold between last year and this year.
Another issue affecting the business, according to the director of Lodhia Steel and Plastic Industries, Mr Sailesh Pandit, is the approval of import permits for steel scrap.
“There is too much bureaucracy in acquiring such permits as we are first required to submit our application to the ministry responsible for the environment that takes too long to get, so by the time you get your permit, the price has already fluctuated,” he said.
Another area where the government could work on is the timely transfer of payments to manufacturers when they win various tenders to supply materials, he said, adding that power outages must also be addressed.
In response to their concerns, Minister of Trade and Industries, Prof Kitila Mkumbo informed them that the government plans to relax issuing of permits to steel firms beginning next week.
“This meeting is part of President Samia Suluhu Hassan’s vow to ensure that local manufacturers deliver materials for construction projects funded by the International Monetary Fund’s 1.3 tri/- Covid-19 assistance fund,” he said.
Prof Mkumbo stated that a large amount of construction material will be required in a short period for the construction of classrooms and Intensive Care Units.
“We have learned that there is sufficient cement supply in the country, but there is a price increase in iron sheets and bars, therefore I convened this meeting to discuss solutions,” he added.
He estimates that around 134,250 tonnes of cement will be required, as well as 795,000 reinforced bars and 1.17 million iron sheets. According to him, the ministry’s survey found that some industries may be unable to deliver.
The minister underlined the need for manufacturers to pay attention to problems such as the quality of material manufactured and provided, particularly for government projects, as well as business ethics. Tanzania has 15 steel metal plants, up from 5 in 2005. They have a total capacity of 420,000 tonnes of steel per year.
“It is vital to follow government standards and not accept any compromises; contact authorities if any government officials lead you astray in giving bids,” he stated.
Plasco’s Chief Operating Officer, Alimiya Osman, stated that the cost of imported raw materials has increased, causing them to lag behind in their operations.
