Aluminium Material Flow and Value Chain Analysis in the Kenyan Industry

Abstract

Vision 2030 is Kenya's development blueprint aiming at making the country a newly industrialized middle income nation, and providing high quality of life for all the cit- izens. In support of this vision, this research work aimed at investigating the supply chain systems and demand for aluminium in Kenya. This is because aluminium has practically replaced copper in high-voltage transmission lines in Kenya. The other major uses of aluminium in Kenya include: domestic and industrial construction, packaging (aluminium foil, cans) and kitchenware. Material categories and transfor- mation processes were identi ed and the material ows examined. Aluminium con- sumption, production and availability was determined by collecting secondary data from Kenya National Bureau of Statistics, Kenya Bureau of Standards, Ministry of Environment and Natural Resources, and Kenya Association of Manufacturers. The primary data and e ects were acquired from the industry players through question- naires that were distributed and interviews carried out in speci c industries. The analysis was carried out through Material Flow Analysis and Value Chain Analysis. Annual collective data on aluminium consumption, production, and e ciency to assist in running aluminium industry has not been available to users. Therefore there was a need to avail the data on the market in order to get a clear understanding and information on aluminium material transformation, consumption, production and use by the government and potential investors in Kenya. The study established that from 2003 to 2007, local bauxite, imported bauxite, im- xxiii ported billets, coils and ingots, imported semi fabrications and castings, imported scrap and local scrap consumption increased steadily by 35% , 55% , 37.1% , 35% , 197% and 241% respectively. The year 2008 recorded a slight drop due to the 2007 political instability. Imported bauxite, unwrought aluminium and and wrought aluminium consumption was projected to increase by 53.1% , 54.9% and 32.8% re- spectively between the years 2009 and 2019. During the period of study, aluminium sector recorded Material E ciency, Energy E ciency and Capacity Utilization rate means of 80.95% , 26.68 mt/TJ and 48.84% respectively. The local industry e - ciencies compared too low to the global Material E ciency, Energy E ciency and Capacity Utilization rate that varied between 92% to 98% , 80 mt/TJ to 92 mt/TJ and 81% to 93% respectively. Information on use of aluminium material in its primary and secondary states was provided. The ndings of the study will be useful to the private sector and government when establishing the cost of transformation, consumption and production that may lead to investing in aluminium processing plant in Kenya. Value chain analysis will pro- vide the basis of determining the material costs that are incurred at each stage of the production cycle for this material, which will consequently facilitate the formulation of a long-term duty structure. This will form the basis for informed and supportive decisions from policy makers and during trade negotiations over tari s with other countries. Current and potential investors will be able to forecast market trends