Home » Kenyan billionaire Narendra Raval faces sanctions for inflating steel prices

Kenyan billionaire Narendra Raval faces sanctions for inflating steel prices

by Omokolade Ajayi
Narendra Raval

Kenya’s Competition Authority has imposed fines totaling Ksh338 million ($2.34 million) on nine prominent steel manufacturing companies, including billionaire Narendra Raval‘s Devki Steel Mills, for their alleged involvement in price inflation.

The move is part of the state corporation’s efforts to uphold fair competition and protect consumers’ interests.

The Competition Authority of Kenya, established in 2010, regulates and promotes competitive business practices within the country’s economy. In accordance with the Competition Act of 2010, which aims to enhance the well-being of Kenyan citizens, the Authority has taken this step to ensure a level playing field in the steel industry.

The penalized companies include Nail and Steel Products Limited, Brollo Kenya Limited, Blue Nile Wire Products Limited, Tononoka Rolling Mills Limited, Doshi & Hardware Limited, Corrugated Steel Limited, Jumbo Steel Mills, and Accurate Steel Mills Limited. 

The Competition Authority uncovered evidence of price fixing, where these companies, including Narendra Raval’s Devki Steel Mills, collaborated to collectively set prices and align price adjustment timelines.

According to Adano Wario, acting director-general of the Competition Authority, the fines have been calculated to be commensurate with the gravity of the offense, particularly considering the adverse impact on consumers who have been grappling with high steel product costs.

The imposition of these penalties serves a dual purpose of reinstating healthy competition in the sector and discouraging other businesses from resorting to anti-competitive strategies for their commercial gain.

“Cartels formed by businesses for their own economic interests are detrimental to consumers and the overall economy. In this case, the steel manufacturers collaborated to manipulate prices, margins, and output strategies,” Wario said.

The Ksh338.8 million ($2.34 million) penalty against the implicated companies sets a new record as the highest-ever fine levied by the authority. This significant penalty underscores the illegality of cartel behavior under the Competition Act.

Devki Steel Mills, led by Raval, the company’s chairman, has recently experienced an unprecedented surge in demand for its steel products. The company attributes this surge to its competitive pricing strategies and innovative production techniques.

Since its inception in November of the previous year, Devki Steel Mills has been operating at 60-percent capacity, primarily to fulfill domestic orders.

In response to the escalating market demand, the group’s steel mill in Kwale County is actively scaling up its operations with the aim of reaching 100-percent capacity within the next three months. Increased orders from neighboring countries such as Tanzania and Uganda have prompted the company to expedite its production processes.

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