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Potential for Public-private Partnerships between Uganda’s Steel Companies and Development Firms

The story of Roofings, Uganda’s largest manufacturer of steel products, shows how a construction boom can generate manufacturing growth. The company was founded in 1994 by Sikander Lalani, a Ugandan Asian entrepreneur who trained as a histo­pathologist before leaving medicine for business. Today the company, which is still family-owned, boasts 1,850 permanent employees. The original plant in Lubowa, just outside Kampala, has now been supplemented by the $180m rolling mill complex at the Kampala Industrial and Business Park in Namanve, where Roofings was the first business to start operations. The latter project attracted funding from the International Finance Corporation, the private sector lending arm of the World Bank, as well as a 10% equity stake from the Japanese steel firms Yodogawa Steel Works and Fujiden International. That relationship helped with technology transfer. The long construction boom has taken place against the backdrop of tepid manufacturing performance: there are more male Ugandans employed on building sites than in factories. But demand for construction materials can help stimulate industry, and companies like Roofings are the channel through which these multiplier effects flow. The government wants to build an industry which encompasses the entire value chain, right back to the iron ore which is dug out of the ground in Kabale, in the southwest.

SOURCE: AFRICAN BUSINESS

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