Development Of Iron And Steel Processing Plant In Kenya

Abstract

Steel plays a very key role in the transformation of an economy, as it is the key driver in any industrial revolution majorly being used in transport, building and construction, power generation and machinery. It is in this regard that the study of iron and steel in Kenya is important. This study sought to determine the viability of setting up an iron and steel processing plant in Kenya, develop a process design for such a plant and determine the plant's economic feasibility. This research employed an exploratory study design with its main objective being to develop a process design that could be used in setting up an iron and steel processing plant in Kenya. Data for this study was collected from published works, government agencies and other private bodies, most of which was primarily secondary. Forecasting of demand into the year 2030 was done to establish the probable future market and also the size of the plant. Forecasting was done using trend projection and moving averages time-series model methods. The compounding interest formula was also used for determining future Hot Rolled Coil (HRC) demand. Economic analysis of the proposed Kenyan steel plant was carried out to determine its profitability. The study established that the country has 20 steel mills serving a Kenyan market of 1.6 million tons/year. These steel mills have a combined installed capacity of 340,000 tons of liquid steel, a finished production capacity of 555,000 and 245,000 tons of light long and flat products respectively. However, there is seemingly no production of HRC, heavy sections and steel plate within the country which creates an investment opportunity. Demand for steel in the country was projected to rise from 1.6 million tons (2014) to 7.1 million tons by 2020 and 8.4 million tons by 2030. Of the 1.2 million net imports in 2014, 704,000 tons were HRCs signifying a massive near-term investment opportunity in this area. The study established that with the country investing in this near-term opportunity, it would have a market of about 1 million tons to serve by 2018, a value which was projected to rise to 2.5 million tons by 2020 and 3.6 million tons by 2030. The study also determined that an establishment of a steel mill within the country would best be approached in two phases; (Phase I) being to set up an Electric Arc Furnace (EAF) steel plant producing 1 million tons of HRC and the second phase (Phase II) would work to supplement the scrap in Phase I through provision of more iron units to the EAF in the form of Hot Briquetted Iron, Direct Reduced Iron or Hot metal as the demand for HRC increases to values beyond 2 million tons by years 2020 and beyond. However, the choice of technology to use for the Phase II facility would largely be dictated by the type of iron and coal found present in the country. However, guided by a developed choice matrix, this study proposes the use of Corex Technology as it has the capacity to utilize the locally available resources and has a wide reference having been used in South Africa. The study therefore proposes that the process design for a steel manufacturing plant in Kenya should be approached as follows; A phase I EAF facility with an output capacity of 1 million tons per year, a phase II facility to supplement the Phase I facility when demand above 2 million tons per year and a phase III facility for downstream operations at a later stage.