An Accurate Steel Mills Perspective
It seems like not so long ago that we had looked forward in optimism to the year 2020. We talked of major investments, new product offerings and huge eagerness of the year ahead. Now, all of that seems a long way away as we stare into our new reality which has been greatly affected by the Novel Coronavirus (Covid-19).
In these uncertain times, we are sure that you will see plenty of hardships faced by the global economy, and you may have been wondering what that means for the steel industry and its dependent industries, such as real estate, fabrication etc. We look to providing a basic understanding of the market at this point.
As a slight side note, it is our responsibility to ensure that we play our part in guiding the country through this difficult time. That is why we are proud to announce that Accurate Steel Mills is availing its manufactured oxygen (medical grade) to hospitals at no cost! We remain committed to doing our part to help Kenyans fight this as it starts to become worse.
With relation to the steel industry, we expect to see a period of steel shortages in the coming months, caused primarily by the fact that most manufacturers will suffer from:
Lack of Raw Materials: most of our trading and export partner countries in Asia and Europe are either in the epicenter of the crisis or facing their second or third wave of Covid-19 related cases. At the time of this writing, most countries remain operationally grounded as lockdowns are expected to extend well into May 2020. This means that most capital expenditures, such as machine investments as well as operating expenditures, such as raw materials, consumable items and other components will be delayed. As most businesses in the sector do not hold large quantities of stock, the pressure will start to come harder on manufacturing companies.
Manufacturing shortages: given the current curfew as well as containment of counties within the country, there are a number of manufacturers who have temporarily shut their doors in order to preserve what little cash flow they have built up to stem their business through this period. We expect this shortage to continue given that the cases domestically in Kenya are still on the rise and we do not see the lockdown being lifted in the immediate future.
As the situation stands as one of the leading manufacturers in the country, our doors remain open. The government ordained curfew has reduced our operational production by 30%, but we continue to serve all customers in the market and remain proud to stand by you. We have noticed through our operations within the last few weeks that although there was a slight decline in market demand for steel, this will not continue to be the case. Steel demand is rising as projects fall further behind and there is pressure (especially from international backers) to continue this progress.
We, therefore, look to encourage all the market that there will be no collapse. At present, in the darkest of times, it seems possible to look at their being no way that life will resume or return to normality. And perhaps it won’t. But what you can be absolutely sure of is that, as Kenyans, we will persevere and stand by our brothers and sisters and emerge through this a stronger nation.
Accurate Steel Mills continues to remain at your service – we will continue to update you during the year on our progress with each product. Please give us all your inquiries and continue to follow us in Construction Review Magazine or on our social media platforms. All of our investments have seen a slight Covid-19 impacted delay, but we are confident that we will finish and reveal them to you as soon as possible. We thank you for all your support and most importantly, stay safe during this time!
For more information, please visit http://www.accurate.co.ke/
