Swiss investor acquires 51% of Otavi steel plant

NDAMA NAKASHOLEThe shareholding ratio of the new steel manufacturing plant at Otavi will be 51% for a Swiss company and 49% to Otavi Rebar Manufacturing (ORM) (Pty) Ltd respectively.Industrialisation minister Tjekero Tweya said last Thursday in parliament the Otavi Rebar Manufacturing plant that will produce rebar, which is reinforced steel used as rods in concrete, had an initial projected investment of just under N$3.3 billion, of which the project promoters have contributed N$1 billion.Nampa recently reported the steel manufacturing factory in Namibia has been earmarked to start operating at Otavi in the Otjozondjupa Region before December this year. The Otavi town council was quoted as saying that over N$2.7 billion has been secured from commercial banks for the steel manufacturing company.The factory will buy and melt scrap metal materials to manufacture the steel wires and irons from the 14 regions.Tweya said the project was promoted during the Invest in Namibia International Investment Conference during November 2016 and a memorandum of understanding (MoU) was signed with South Korean company, MK International. “The MoU between MK International and the Otavi town council was based on the supply of the second hand plant from South Korea, with a capacity of 380 000 tons per annum,” he said.However, the Otavi town council revisited this option and the agreement with MK International, and opted to terminate the MoU. The decision to terminate was considered favourable for the council, which allowed it to restructure the financial model for the new plant, as opposed to a second hand one, he said.“On 26 January 2018, Otavi Rebar Manufacturing entered into a MoU with a new partner, NORIC Steel, a Switzerland-based company,” Tweya said. The shareholding ratio will be 51% to NORIC and 49% to Otavi Rebar Manufacturing, he said.Rising demandAccording to Tweya, 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 government’s request for increased manufacturing of building supplies, including cement, and other products to meet the rapidly rising demand.”Tweya said that by developing the local manufacturing of building supplies, the country will buffer itself against unexpected gaps in imported supplies. At present there is no rebar manufacturing facility in Namibia and all rebar used in the country has 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,” he said.Job creationNampa recently reported that a total of 700 direct jobs are expected to be created by the factory.“Due to the cancellation of the contract with a South Korean company, the anticipated employment could not be generated,” Tweya said.He said on Thursday that information at his ministry’s disposal reflects that the project will initially create 140 new employment opportunities, which will gradually increase over time. “In addition to the 140 jobs, they will also ensure that staff training and capacity-building is enhanced to meet international standards,” he said.“However, noting the new partner’s drive to reach the financial closure to this project by end of August 2018 and the groundbreaking ceremony during September 2018.”Tweya said construction will be completed by September 2020.Road to victoryTweya said the company, Otavi Rebar Manufacturing (Pty) Ltd (ORM) was founded in 2012 and commenced with the development of a feasibility study to establish a rebar manufacturing plant in Otavi. ORM intends to build a 148 000 tonnes per annum rebar manufacturing plant.The MoU between MK International and Otavi Town Council was signed in 2016, and was based on the supply of the second hand plant from South Korea, with a capacity of 380 000 tons per annum,” he said.Following the termination of the old MoU with the South Korean company, Otavi Rebar Manufacturing entered into a MoU with a new partner, NORIC Steel, a Switzerland based company. “This new agreement is based on the supply of the new plant with a 400 000 ton per annum capacity,” he said.

Swiss investor acquires 51% of Otavi steel plant

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Republikein 2026-02-03

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Swiss investor acquires 51% of Otavi steel plant

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