Kindly introduce yourself to our readers.
My name is Mahesh Pathak, a graduate in economics with an MBA, I have been in this industry for almost 40 years now and I have worked with various industries that touch on steel, the roofing industry and the steel manufacturing industry, particularly in the steel reinforcement section.
What is your role at Tononoka?
I am the Chief Executive Officer at Tononoka Group.
Where do you place your company in the Kenyan steel industry?
Based on the production which we do I believe we are amongst the top three. It’s always been our goal and agenda to be on top of the table when it comes to steel manufacturing and that is where we are heading.
How has Steel manufacturing process changed over time?
Procedures have not been the same and neither has the product. Over time, things have changed from old school to new school, you can recall a few years back we had twisted bars which have since been banned by the government. This is one of the greatest change which the industry players have been pushing for. Over the years it has always been considered that steel manufacturing is dangerous to the environment but over time that notion has changed, if you look around you can see how healthy our environment is, we work tirelessly to ensure that we protect the environment and keep it green.
With the risks involved, what are some of the industrial health measures you put in place that guarantee safety for personnel.
This is a journey that calls all players to participate in. From the time you recruit to the time you hire, you have to place emphasis on safety. We do not gamble on personnel safety and you will notice that all our personnel are fully equipped with safety gears. We also do internal training on safety to ensure everyone is equipped with all safety code of conducts. On top of that, our safety marshals make regular inspections within the mill to ensure all safety rules are being enforced and adhered to.
What’s your take on Tononoka and in general the steel industry’s contribution to the country’s economy?
You see it’s always said that steel consumption of a country determines the economy of the country. So as the steel sector we become very important players in the economy of the country. We contribute to at least 13% of the total manufacturing in the country. To sum it up also, we hire a huge number of employees due to the labor demand; this minimizes the level of unemployment in our country.
I would like us to discuss in your opinion what you think are the challenges that are affecting the manufacturing industries and more specific in the steel industry?
Competitiveness or rather cost of production comes to mind because it’s the most important thing for any manufacturer. Kenyan manufacturers today are uncompetitive as compared to others in the region due to high cost of production. The major things are the IDF like in Uganda IDF is zero, in Tanzania it is 0.6 and in Kenya we are at 2% so that makes us uncompetitive. In Kenya we pay the railway development levy 1.5% again that contributes to our uncompetitiveness compared to our counterparts in the region. Top that up with the power cost, Kenya is the highest by far. That’s one of the major challenges that we keep pressing on, that power cost needs to come down so that we can compete with countries like China, Egypt, Zambia and even Ethiopia. Manufacturers in all these countries pay lower power bills than we do here in Kenya. The borrowing costs are also quite high in Kenya the Interest capping notwithstanding. Furthermore our infrastructure is quite poor raising for instance our cost of transportation which is still an element of production costs. These in my opinion are the challenges that we are facing as an industry and if addressed, we might see a big change in growth of both the country and business.
What attempts have been made to tackle these challenges?
We keep on investing in new technologies to enable us push down our cost of production because there is very little we can do about some of those challenges. Through the Kenya Association of Manufacturers, we try to push our agenda and we were glad to hear that Mr. Aden, the previous CS of Industrialization, said the government was considering abolishing the IDF and Railway Development Levy of raw materials which we have been fighting for quite some time. We also directly engage with ERC and Kenya Power to negotiate for better power rates or change the structure in a way that large industries like us are able to get cheaper tariffs so that we can compete effectively in the market.
Would you blame inferior quality products for the rise in collapsing buildings?
Not really, I think it’s down to construction code enforcement. It is not practical to put up a six storey building in three months. And if you look at the government agencies which are supposed to control and enforce construction code, they carry a lot of responsibilities rendering them ineffective. The steel companies, like many other manufacturers, are regulated by the Kenya Bureau of Standards (KEBS). They regularly come take samples for testing from the plant and they give us the results and certifications. Today some clients are knowledgeable enough to ask for these certifications before making a purchase which is a great step towards educating the masses about quality. Now that kind of thing must happen in the construction industry to make sure that every building which is coming up is coming up in the correct manner and is fully compliant with all the regulations set in place.
How are you keeping your cost of production at the minimum given the high power bills?
We keep investing in new technologies to reduce our costs while we keep on pressing the government because it is their role also to ensure favorable conditions for us to operate. None the less, we are investing in technologies that will bring down our power consumption by up to 15% for the same amount of work.
What’s your comment on the quality of Engineers and Technicians you employ, specifically those straight from our universities and colleges?
To be honest my belief is graduates from all universities who are doing the same degree end up going through the same syllabus but what matters the most is that; how interested is that graduate and what attitude do they have towards the job? Because what happens is that when you are in college or university you go to a certain extent which is giving you a broad look about everything but when you come here you come to a specific role to play for a specific industry. So how you take that job, how you take up those challenges and how you put your interest into it and how you develop yourself into it makes the difference the big difference.
Thank you for your time Mr. Pathak…