$10m Kigali project to create over 2,000 jobs

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Nsengiyumva is flanked by Hategeka and Dauck as he commissions the plant last week. (Teddy Kamanzi)

Hundreds of TVET graduates and thousands of cereal farmers stand to win big following the commissioning of a new facility that will start producing building materials in Kigali. 

STRAWTEC Building Solutions Rwanda is a $10 million (about 7.4 billion) plant that specialises in the production of high-quality pre-fabricated wall panels from wheat and rice stalks. The firm is expected to create more than 2,000 jobs for agronomists and wheat farmers in the country.

According to Albert Nsengiyumva, the State Minister for Technical and Vocational Education and Training (TVET), the facility is expected to benefit more than 1,000 TVET graduates and crafts men along the value chain.

Another 1,000 specialised construction jobs will be created across the country, according to Nsengiyumva.

The minister was speaking during the commissioning of the mega facility at the Kigali Special Economic Zone in Nyandungu, Gasabo District in the City of Kigali last week.

Under the second Economic Development and Poverty Reduction Strategy (EDPRS II), government is counting on the private sector to drive the country’s industrialisation and development initiatives to help create at least 200,000 off-farm jobs annually by 2018.

Therefore, the commencement of production at the facility is a big step toward the realisation of   this objective, Benjamin Gasamagera, the chairman of the Rwanda Private Sector Federation (PSF), said.

“We must embrace innovative alternative solutions that will help create more jobs as well as fast-track the country’s economic growth. PSF is ready to work with and support all investors to achieve these and other objectives,” Gasamagera said.

According to Eckardt Dauck, the chairman of STRAWTEC Building Solutions Rwanda, the company is committed to supporting skills development in the country through knowledge transfer programmes so that more Rwandans benefit from the project. This approach, he added, will help create more sustainable jobs for the youth.

The company targets to bring to the market about 2,000 housing units (of 50 square metres) per year. The 30-metre free span steel structure accommodates the strawboard production high-tech equipment that uses crop fibres like rice and wheat stalks (straws) to produce high quality boards.

Reduction in affordable housing shortage

According to Emmanuel Hategeka, the Trade and Industry Ministry permanent secretary, the facility will help boost competitiveness of the country’s real estate sector and make it more profitable.

“And to be able to reduce our imports bill by at least $450 million by 2018, as well as meet our domestic, regional and global demand for various products, such practical solutions are critical,” Hategeka said.

Besides, Rwanda needs more than 344,068 housing units by 2020 to be able to meet the growing demand. That means more than 35,000 housing units on average per year.

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The facility in the Kigali Special Economic Zone. (Teddy Kamanzi)

With STRAWTEC providing some of the building materials, the real estate sector should be able to ease this shortage, especially bringing more affordable houses on the market.

There has always been an outcry among real estate developers over lack of some of the essential building materials, which they say pushes up the cost of homes as most of the materials are imported from within the region and beyond.

That is the reason why Charles Haba, the director of Century Real Estate and chairman of the local Association of Real Estate Developers, believes the facility could be a game changer for the country’s real estate industry.

“It is a perfect solution for the quest of affordable housing… However, the issue is whether they will be able to get the raw materials they need to produce enough products to meet the market demand in a sustainable manner,” Haba told Business Times.

It is anticipated that construction using strawboards could cost well below $400 (about Rwf302,000) per square metre compared to other construction materials. A complete house will cost about Rwf15 million.

According to Haba, such alternative building solutions are best suited to help bring to the market affordable houses, especially with the country’s rate of urbanisation of 4.1 per cent, and almost 17 per cent of the population that lives in urban areas.

Import substitution

Rwanda is importing most of the materials needed by the real estate sector, a situation that has always held back efforts to deliver affordable houses to the population, especially the middle and low-income earners.

Fred Rwihunda, the president of the Institute of Engineers Rwanda, observed that using locally-sourced raw materials could help ease the cost of construction and, ultimately, that of homes.