THE METAL AND METAL

PRODUCTS INDUSTRY

 

1    CONTENT

 

1     CONTENT

         2

2     OVERVIEW OF THE METAL AND METAL PRODUCTS INDUSTRY

         3

3     DEVELOPMENTS IN THE  INDUSTRY

 

3.1 METAL INDUSTRY POLICY ENVIRONMENT

 

    3.2 METAL INDUSTRY  PERFORMANCE

 

 

4     INVESTMENT OPPORTUNITIES IN THE INDUSTRY

         6

5     UGANDA’S COMPETITIVE ADVANTAGE

         10

5.1      LAND

 

5.2        TECHNOLOGY 

 

    5.3       TECHNICAL KILLS   

 

5.4           EXISTENCE OF LOCAL      MARKET

 

   5.5      EXPORT  MARKET POTENTIAL 

 

 

6     KEY PLAYERS IN THE METAL  AND METAL PRODUCTS  INDUSTRY

 

 

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7     USEFUL CONTACTS  IN THE METAL  AND METAL PRODUCTS INDUSTRY  ................................... 17

 

 

 

 

 

 

 

 

 

 

2    OVERVIEW OF THE METAL AND METAL PRODUCTS INDUSTRY

 

Metal working in Uganda comprises of blacksmithery, metal fabrication, foundry shops, steel plants and mechanical workshops (machine and forging shops). The metal working sector is strategic in economic development because the constituent industries manufacture structural metal products such as steel structures for factories and related installations, spare parts, motor vehicle bodies and trailers, domestic appliances, tanks, etc.

 

The reforms recently implemented by the government such the removal of import bans, elimination of licensing requirements, the reduction of import tariffs, the elimination of export taxes and abolition of the requirements for exporters to relinquish their foreign exchange earning to Bank of Uganda. These have opened up a number of sector activities. More specifically the industries that consume metal products.

 

Specific examples of the sector which consume metal products are sugar industries, tea factories, railways, cement plants, cotton ginneries, textile industries, steel plants, mining, electrical machinery, oil and soap manufacturing etc.

3    DEVELOPMENTS IN THE INDUSTRY

3.1     METAL INDUSTRY POLICY ENVIRONMENT

The metal sector is positioned strategic in the country’s medium term competitive strategy objectives. The ultimate goal of the government is to create a good  business environment for the private sector to compete, boost domestic economic activities and increase Uganda’s exports. The strategy aims  at providing an enabling environment  for a private sector that:

 

·    Can make profits

·    Will have a higher capacity to create more jobs

·    Operates in a free and fair competitive environment;

·    Is attractive to private investment, both local and foreign; and

·    Has a strong export base.

 

The key purpose of these objectives is to support:

 

·    The successful reformation of the sector.

·    Increase productivity in Metal Sector

·    Expand the formal private manufacturing sector;

·    Improve incomes through new job creation and better jobs.

 

 

 

 

Government has implemented to a number of policy reforms by providing strategic priorities in infrastructure:

 

The objectives of the proposed infrastructure reforms are to:

 

·    Reduce the cost of infrastructure services

·    Improve the quality of infrastructure service

·    Increase access to infrastructure

·    Reduce the cost to government of infrastructure provision, or at a minimum improve the efficiency of government subsidies for infrastructure.

3.2     METAL INDUSTRY PERFORMANCE

The industrial sector of which the metal working sector is a part, has been          recovering and registering growth rates averaging over 12.2% per annum since 1991 as shown in Graph1. Per capita construction of steel in Uganda was about 8 kg in 1960’s,1 kg in 1985 ,2.5 kg in 1991  and is now picking up. It was about 7.5 kg in 2000 .It is expected to rise to between 12  and 15 kg in the next 2 years.

 

 

Graph 1 Graphic Representation of GDP growth rates in the manufacturing sector in Uganda. (1990- 2000)

 

 

Source: Statistics Department, Ministry of Planning and Economic Development 2000

 

The steady growth in the metal products consuming sectors has led to an increase in demand for imports of metal products averaging US $ 258 million per annum since 1993 as shown in Table 1. This represents a big opportunity for import substitution.

 

 

 

 

 

 

 

Table 1: Domestic imports of metal related products by value (US $ ‘000)

 

3.2.1    Item

1993

1994

1995

1996

1997

1998

1999

Iron and Steel

17,108

44,653

49,439

47,558

45,438

47,444

44,982

Non-Ferrous Metals

 2,933

 5,193

 8,301

12,274

10,412

9,062

7,476

Manufactures of Metal

21,858

20,681

29,086

26945

24,170

28,282

30161

Power Generating Equipment

3,123

 7,775

10,403

 10,082

15,473

26,316

11,192

Industrial Machinery

23,498

25,322

53,062

34,123

28,159

39,293

36,921

Metal Working Machinery

 2,480

 2,198

 4,512

3,165

1,934

2,408

4,245

Industrial Machinery and Spares

17,347

20,466

29,614

31,151

23,450

36,260

28,613

Electrical Machinery and Appliances

22,400

28,838

39,556

36,543

27,030

47,230

50,809

Road Vehicles

57,607

94,955

149,055

123,988

104,636

130,321

97,194

Other Transport Equipment

 986

 7,258

 3,053

 3,526

1,436

1,323

9,817

Total

169340

257,339

376,081

331,351

284,135

369,937

323,409

Source: Statistic Department, Ministry of Planning and Economic Development 2000

 

The metal working sector uses the following raw materials as shown in Table 2.

 

Table 2 Availability of Raw Materials Used In The Metal Industry

Sub-sector

Materials

Locations of

industries

Raw material 

Source 

Quantities Available

Locally

Foundry

Scrap

Sand

Furnace

Kampala,

Jinja, Mbale and

Mbarara

Local

Local

Local

200,000 tons

2 million tons

Fabrication

Rolled Sections

 

 

Plates

Paints

Welding Rods

Kampala and

Tororo

 

 

 

Local Steel Plants

 

 

Imported

Local

Local/Imported

 

200,000 tons

Machine Shops

Shafting

Blanks

Tools

Kampala,

Jinja

Imported

Imported

Imported

 

Galvanising Plants (Roofing, Fencing, etc.)

Steel Sheets

Chemicals

Rodwire

Kampala

Imported

Imported

Local Steel Plants

 

 

10,000 tons

Steel Rolling Mills

Billets

Scrap

Limestone

Iron Ore

Alloys

Kampala

Jinja and

 

Mbarara

Imported/Local

Local

Local

Local

Imported

5000 tons

200,000 tons

100,000

4 million tons

 

 

Source:           Uganda Metal Industries Development Association (UMIDA 2000)

 

These  Mills produce the following items:

 

· Rod wire

· Steel sections

·Twisted hoop or single flat

· Fabricated items like beds, windows, doors, gates, tanks

· Barbed wire

· Foundry products

· Grilles,netting, fencing

· Hoes and Agricultural implements

· Screws, nuts, bolts

· Lorry/bus bodies

· Nails, tacks, drawing pins,     roofing nails

· Roofing iron sheets, etc.

 

 

Table 4 shows production figures of metal products in Uganda since 1991.

 

Table 3 Production of Iron and Steel products items in Uganda

 

Item

1991

1992

1993

1994

1995

1996

1997

1998

1999

Steel Doors & Windows (Tonnes)

-

-

292

130

150

203

143

134

124

Hoes (Nos)

784,000

813,000

813,000

881,000

1,026,000

1,026,000

0