Tororo’s New Steel Plant: A Game Changer for East Africa’s Construction Boom, A Trade & Strategy Analysis.

The announcement that Devki Steel Mills, Kenya’s largest steel producer, is establishing a major plant in Tororo, Uganda, has triggered huge debate in policy, business, and investment circles.

Devki dominates Kenya's steel landscape, so why would it build a factory in a neighbouring country with growing industrial capacity and rising steel competition?

At first glance, it looks risky. A deeper analysis shows that Devki’s move is both calculated and strategic, representing a major shift in the industrial dynamics of East Africa.

1️⃣ Devki Isn’t Weakening Kenya’s Steel Sector, It’s Expanding Kenya’s Industrial Influence

Devki’s move is not about “moving away from Kenya.” It is about expanding Kenyan capital into Uganda’s booming construction economy.

Whether:

• Kenya exports steel to Uganda.

or

• Devki produces steel inside Uganda.

because Devki is a Kenyan-owned multinational, it means Kenya still wins…

In essence, regional expansion would serve to make Devki:

• continued market control

• protection of its export share

• repatriation of profits back to Kenya

• strategic positioning within key markets

This is Kenyan industrial diplomacy through the private sector.

The groundbreaking ceremony of the steel plant attended by both heads of state and CEO of Devki Group

2️⃣ Why Uganda? Because Devki Is Protecting Its Most Valuable Market

Uganda imports more goods from Kenya than from any other country in the world.

But Uganda is rapidly advancing import substitution, with strong steel producers like:

• Roofs

• Tembo Steels

• Steel & Tube

• Pramukh

• BM Steel

• Mayuge Steel Division

…a country's domestic competition increases.

Devki knows full well that unless it enters Uganda physically, Ugandan firms will cut down Kenya's steel exports drastically.

So the logic is:

👉 If Uganda doesn't import Kenyan steel, then Devki should be producing steel in Uganda.

👉 That way, Devki doesn't lose the market; it changes its delivery model.

Devki is hedging against Uganda's industrial rising power.

3️⃣ Tororo Is the Perfect Location - Not Random

Devki picked Tororo strategically, because it is:

• which is just a few minutes away from the Kenya border at Malaba/Busia.

• Close enough to cheaply supply Western Kenya

• located close to Uganda's iron ore deposits, at Sukulu and Eastern regions

• directly connected to a key transport corridor

• The ideal place to serve DRC, Rwanda, Burundi, and South Sudan.

Tororo enables Devki to:

• bypass long-haul logistics from Nairobi.

• reduce transport costs

• Reduce dependence on Mombasa–Malaba bottlenecks

• establish a regional export hub

To be sure, Tororo isn't just a Ugandan town; it's a regional industrial gateway.

4️⃣ Devki Is Targeting Uganda's Infrastructure Boom

The following are some of the factors that have contributed to the increasing demand for steel in Uganda:

• The oil pipeline, EACOP.

• Hoima refinery developments

• hydro projects

• Industrial Parks

• bridges and expressways

• housing growth

• warehousing & real estate boom

While Kenya has almost similar demand for steel, Uganda's demand will grow faster over the decade.

Devki wants to capture:

• Uganda's domestic demand

• regional exports passing through Uganda

• long-term infrastructure contracts

This is a growth-driven expansion, not a defensive one.

5️⃣ How Devki’s Tororo Plant Differs From Uganda’s Existing Steel Producers

Powerful players in steel already exist in Uganda, especially Roofings and Tembo.

But Devki brings something different:

🔹Regional Scale and Capital Strength

Devki runs large integrated mills in Kenya.

They have:

• deep capital reserves

• strong machinery networks

• established technology

• cross-border brand power

🔹Experience of serving export markets

Devki already exports within the region, with Ugandan companies mostly selling domestically.

🔹Government-to-Government Influence

Devki draws on strong political and policy connections both in Kenya and Uganda, giving them an edge on:

• tax incentives

• industrial zones

• energy pricing

• trade negotiations

🔹Integration with Kenya's Supply Chain

Since Devki will still source some inputs from Kenya, this also enhances the upstream industries of Kenya.

🔹 Regional Supply Chain Dominance

Devki is not building a factory; it is building a regional command centre.

This is what makes the Tororo plant unique.

6️⃣ Kenya Benefits by Allowing Devki to Invest in Uganda

Some ask: Why would Kenya allow its leading steel producer to invest in a competitor country?

Because Kenya gains strategically:

• Devki profits return to Kenya

• Kenya still retains indirect control of the Ugandan steel value chain.

• Devki locks out competing Asian investors from dominating Uganda

• Kenya's Industrial Footprint Grows Stronger Under AfCFTA

• Kenyan suppliers gain new markets: limestone, machinery, scrap, logistics.

In other words:

👉 It would prefer Ugandan steel to be made by a Kenyan company rather than purely by a Ugandan competitor.

This is smart regional power politics.

7️⃣ Devki’s Entry Raises New Trade Policy Questions

The move will force policymakers to rethink:

• EAC tariff harmonisation

• rules of origin for steel products

• Uganda-Kenya industrial competition

• regional incentives for heavy industry

• How AfCFTA treats cross-border investors

This is a major competitive advantage over fully domestic steel firms, as Devki will benefit from both countries' policies.

Conclusion - Devki's Tororo Plant Is Not Just Business; It's Strategy!

Devki's entry into Tororo proves one thing:

East African industrialisation is increasingly cross-border, competitive, and geopolitical.

Devki's expansion is about:

• protect its markets

• securing regional dominance

• benefiting from Uganda's incentives

• Positioning for AfCFTA

• capturing infrastructure-driven demand

• Influence regional supply chains

  
  

  This move will reshape the steel economy of Uganda, Kenya, and the whole EAC bloc.