The reinforcing steel manufacturing plant is to cost N$3.3 billion of which the project promoters have contributed N$ 1 billion, the minister of industrialisation, Tjikero Tweya announced in parliament last week.
This project was promoted during the Invest in Namibia Investment Conference in November 2016 and a Memorandum of Understanding (MoU) was signed by MK International and Otavi town council.
“The MoU was based on the supply of the secondhand plant from South Korea with a capacity of 380 000 tons per annum. However, Otavi town council revisited this option and the agreement with MK International and opted to terminate the MoU. The decision to terminate was considered favorable for the council which allowed the it to restructure the financial model for a new plant as opposed to a secondhand one,” he stated.
He added that in January this year Otavi Rebar Manufacturing entered into an MoU with a new partner, NORIC Steel, a Switzerland based company and this new agreement is based on the supply of a new plant with a 400 000 ton per annum capacity.
Tweya also said that the shareholding ratio will be 51% NORIC: 49% Otavi Rebar Manufacturing and Namibia is currently engaged in twin drives to construct affordable housing and infrastructure.
“In order to reduce its dependence on imported construction material, the project is a response to a government request for increased manufacturing of building supplies, including cement, and other products to meet the rapidly rising demand. By developing local manufacturing of building supplies, the country will buffer itself against unexpected gaps in imported supplies,” he stated.
He added that at present there is no rebar manufacturing facility in Namibia and they have to be imported.
In 2014 the market for rebar in Namibia was estimated at 155 000 tonnes and the demand is projected to grow more than 9% per annum in line with the projected growth of infrastructure and construction projects.