Uganda to benefit from Kenya gas plant

May 16, 2013

The shortage for cooking gas will soon be history in Uganda after Allied East Africa Limited, a Kenyan firm, undertook to invest in a $10m (about sh26b) gas plant in the region.

By Chris Kiwawulo

The shortage for cooking gas will soon be history in Uganda after Allied East Africa Limited, a Kenyan firm, undertook to invest in a $10m (about sh26b) gas plant in the region.

Hamza Ali Noor, the company’s managing director told New Vision that they plan to supply Ugandans with new locally manufactured Liquefied Petroleum Gas (LPG) cylinders at a reduced cost by 20% as compared to the cost of imported ones.

This implies that for instance, a 15kg gas cylinder which costs sh120,000, will be at sh96,000 when the company begins supplying Ugandans in mid-July this year.

Uganda has over time been facing gas shortages due to delayed importation. Over 80% of LPG cylinders used in East Africa are imported.

The gas plant based in Kisaju , Kajiado County in the outskirts of Nairobi, will undertake unique investments in a modern production, re-validation, test and inspection facility for LPG cylinders.

“Our plant is a purely LPG and Firefighting cylinder manufacturing as well as cylinder re-validation. We have excess capacity hence no need for importation of cylinders as this will be our core business,” Noor said in a statement on Friday.

In Uganda, the company plans to open a representative office or appoint a dealer to market its cylinders, Noor pointed out.

“This will increase usage of cleaner, affordable and reliable energy among Ugandans thus protecting their forests and environment and tap the gas that will be produced from the envisaged refinery in western Uganda,” he noted.

With a population estimated at 137 million people in East Africa at the end of 2011 and projected to continue growing at 2.8%, the main sources of energy production in the region are hydro-power, natural gas, coal and fuel (petroleum). Uganda alone has about 34.5 million people.

Noor added that their firm will import steel coils and plates from international suppliers to manufacture competitively priced high LPG cylinders.

The manufacturing plant will initially produce 3,000 cylinders per day and increase production gradually as demand grows.

“Finished products will be delivered to customers in less than 15 days compared to a lead time of four months that imported LPG cylinder take to arrive,” Noor explained.

A sister company of Midland Energy Limited and a member of the world LPG association, the firm intends to provide employment to about 200 people. Noor says the firm’s target is to achieve International Standards Organisation (ISO) 9001:2008 and ISO 14000 certifications within the first six months of operation.

 

(adsbygoogle = window.adsbygoogle || []).push({});