Questions Raised as Previously Banned Chinese Steel Firm Inks Sh19B Deal with Kenya

Serious questions are emerging over President William Ruto’s decision to welcome back a Chinese steel manufacturer previously banned from operating in Kenya due to serious safety concerns, the Nation has learned.

Rongtai Steel Company Limited, which was suspended by the Kenya Bureau of Standards (KEBS) just three months ago for producing substandard construction materials, is now part of a Sh106 billion investment package secured during President Ruto’s ongoing state visit to China.

The company has committed to investing $150 million (approximately Sh19 billion) to expand its operations in Kenya, including establishing a new steel production facility in Lukenya that promises to create 3,000 jobs.

From Ban to Billion-Shilling Deal

In January 2025, KEBS took the extraordinary step of suspending Rongtai’s manufacturing permits after market surveillance revealed the company was producing substandard ribbed bars—critical components used in building construction.

At that time, KEBS seized the company’s products, halted its production, and issued a public warning advising Kenyans against purchasing or using any Rongtai products.

“The use of substandard construction materials undermines the structural integrity of buildings and endangers public safety,” KEBS warned in its January public notice.

The Chinese firm, which established operations in Machakos County in September 2023 with an initial $30 million investment, was producing approximately 300,000 tons of rebar annually before the suspension.

Industry experts are questioning how a company deemed a public safety threat less than three months ago could now be embraced as a major investor without public explanation of what remedial measures have been implemented.

Timing Raises Eyebrows

The reinstatement comes at a sensitive time for Kenya’s construction sector.

Between 2009 and 2019, 86 buildings valued at over Sh2.4 billion collapsed in the country, according to the National Construction Authority.

Many of these incidents were attributed to substandard building materials and poor workmanship.

The suspension of Rongtai in January also coincided with President Ruto’s aggressive push for universal home ownership through his affordable housing program, which aims to construct 200,000 housing units annually.

Part of Larger Investment Package

At least 150 Chinese investors attended the Kenya-China Investor Roundtable held on the sidelines of President William Ruto’s State Visit to China.

The Rongtai deal was one of seven investment agreements worth a combined $823 million (Sh106 billion) signed during the second day of President Ruto’s four-day state visit to China.

Other major deals include:

– The leasing of Nairobi’s iconic Hilton and Intercontinental hotels to Chinese investors
– A $30 million chicken farm project by Shandong Jialiejia Agriculture
– A $20 million textile and garment manufacturing investment by Shangcheng Apparel Group
– A $50 million smart transport sector development by Jiubao Electronic Technology
– A $150 million Special Economic Zone in Kilifi county by China Yu Yi Construction

Safety Concerns

The It remains unclear on what measures the government has taken to ensure Rongtai’s compliance with Kenyan quality standards as no public announcement has been made yet by the authorities.

However, quick rehabilitation of Rongtai’s reputation raises important questions about the government’s commitment to public safety versus the pursuit of foreign investment and job creation.

It also underscores ongoing concerns about quality control in Kenya’s booming construction sector.

Industry watchdogs are calling for transparency regarding any remedial actions taken by Rongtai and whether the company has undergone new compliance inspections before being welcomed back as a major investor.