Mkuranga. Lodhia Steel Industries Ltd has requested the government to increase the customs duty rate for imported steel from 25 per cent to 35 in order to protect local industries.
The request was made during the end of the week when the Southern African Development Community (Sadc) delegates visited the factory at Mkuranga District in Coastal Region.
And, the government representative, who was among the delegates, admitted that the government was aware of the concerns - and was working on it.
Speaking during the visit, the Lodhia Group of Companies managing director, Mr Sailesh Pandit, said most of the mega-project contractors opt to import steel inputs due to the low customs duty on them, rather than buy steel from local producers.
“We are facing unfair competition from mega-project contractors who import steel from abroad due to its low customs duty. We have already informed the government about this concern, but there is no action taken yet,” he told the Sadc delegates.
He added that the Mkuranga steel plant employs about 600 people.
“We could work 24 hours a day if we had demand for our products and thus we would have employed up to 1,200 workers,” he said.
Apart from the 600 workers, Mr Pandit said they have employed about 5,000 employees in their group of companies countrywide out of whom 2,500 are permanently employed.
While Tanzania’s customs duty on steel imports is said to be low, Confederation of Tanzania Industries (CTI) information is that Uganda and Kenya have already raised their duty rates to 35 per cent. CTI also states that Tanzania is leading in East Africa in importing steel materials, which are mainly used for construction works.
Responding to the concerns, the director for industrial development of the ministry of Industry and Trade, Mr Kamara Gombe, said the government was already working on it.
“It is true that those who import steel materials are charged 25 per cent as customs duty, but local steel producers requested us to raise the import duty to 35 per cent to enable them compete with external producers,” he said.