Established in 1996, Athi River Steel is a steel smelting company producing hot rolled steel products from recycled scrap metals.

Its products include fasteners, steel springs building and structural materials. When CDC’s fund manager Aureos invested in Athi River Steel in 1998 through the Acacia fund in which CDC was a founding investor, the Kenyan steel industry was still in its infancy. 50% of steel used in Kenya was imported at high, international prices. The little scrap metal that was collected was exported at very low prices for new use.

Athi River Steel’s business model of sourcing local scrap metals for high quality new steel products proved a success with Kenyan steel purchasers. It also provided important income generation opportunities for an emerging group of scrap metal collection companies.

By 2004, there were over 1,000 scrap metal companies registered with the Kenyan scrap dealer’s association. Athi River Steel estimate there are upwards of 150,000 people throughout Kenya who get income from sales of scrap metal to scrap metal dealers. Aureos made a follow-on investment in Athi River Steel through its East Africa Fund where CDC was also a founding investor in 2006.

The Athi River Steel plant is located in the Mavoko township 30 kilometres east of Nairobi. It provides jobs in a poor region where there are few employment opportunities outside agriculture. Athi River Steel employs over 900 people, many of whom had received no formal training or education prior to joining. Athi River Steel provides comprehensive training to all staff, providing them with valuable new skills which enhance their future opportunities.

The process of steel smelting can be highly polluting, emitting smoke and particles from the furnaces and producing slag as a by-product of melting scrap metals in the furnace. Athi River Steel, with the assistance of fund manager Aureos, has introduced a number of measures to reduce the company’s adverse environmental impact. Improvements undertaken and underway include construction of a higher smoke stack with an air pollution control device to manage and reduce emissions from the plant.

With furnaces, smoke and particle emissions and heavy machinery onsite, health and safety standards are also an important consideration for Athi River Steel. In order to improve the general health and safety standards at the plant, the company has engaged a health and safety specialist and is committed to ensuring that operations meet international standards.