For generations, iron has been part of the history of Rwanda’s Northern Province, where communities once smelted the metal to make weapons, farming tools and other everyday implements.

On Friday, September 11, that history met Rwanda’s industrial future in Musanze District, where Prime Minister Justin Nsengiyumba inaugurated the country's first fully integrated steel manufacturing plant backed up by Indian investors.

Located in Musanze Industrial Park, A1 Iron & Steel Rwanda Ltd is expected to produce up to 250,000 tonnes of steel annually, create about 1,000 direct jobs and another 2,500 indirect jobs, while helping Rwanda cut its reliance on imported steel.

ALSO READ: How Rwanda&039;s first steel processing plant will impact economy

Officials said the plant could cut Rwanda's $200 million import bill by half.

Prime Minister Nsengiyumva said the inauguration of the steel factory is a step towards building a stronger, more productive and competitive industrial economy.

He said the investment also reflects growing economic ties between Rwanda and India, from where the investment originates.

Rwanda has historically relied heavily on imported steel products, while demand is expected to grow alongside infrastructure development, urbanisation and expansion of businesses.

"By processing locally sourced iron ore into finished steel products here in Rwanda, this plant helps us move up the value chain and capture more of the value our own economic development creates,” he said.

However, Nsengiyumva said this should be seen as the beginning rather than the end of the government’s expectations from the investment.

He challenged the investors to ensure that the plant operates at capacity and achieves continuous productivity gains.

"Building industrial plants is just the first step. The greater task, and the one that determines whether an investment truly pays off, is ensuring that capacity is used fully and productively,” he said.

The government, he added, would continue working with the company on infrastructure, energy, skills and regulatory support required for modern manufacturing.

The company management also said the factory would be a key contributor to the growth of Rwanda's industrialisation.

"This is not simply the inauguration of a factory. Today, we are inaugurating a new chapter in Rwanda’s industrial journey,” Himanshu Tiwari, the Managing Director of A1 Iron & Steel Rwanda Ltd, said.

Tiwari said the factory was established with the objective of adding value to Rwanda’s natural resources, strengthening local manufacturing, reducing dependence on imported steel products and creating employment, while positioning Rwanda as a regional producer of steel products.

The production process is expected to transform iron-bearing raw materials through the direct reduced iron (DRI) route into steel, followed by steel melting, billet casting, and the production of various downstream steel products.

The company’s management said the integrated approach would allow Rwanda to capture more value from locally available resources instead of exporting raw materials and importing finished products.

"Steel is not just another manufacturing product; it is the backbone of industrial development,” Tiwari said, noting that steel is required for roads, bridges, buildings, factories, power and water infrastructure, agriculture and real estate.

Beyond job creation, the company said it intends to develop the skills of Rwandan workers to operate sophisticated industrial equipment and modern production systems.

According, the managing director, the plant is expected to provide opportunities for young Rwandans to gain experience in advanced manufacturing, automation and industrial operations.

Government officials also highlighted employment and skills development as some of the key expected benefits of the investment.

Cutting steel imports

The Minister of Trade and Industry, Antoine Kajangwe, said the plant has broader implications for Rwanda’s trade balance because of continued dependence on imported steel.

He said Rwanda currently spends around $200 million annually on steel imports, while the investment is projected to reduce the country’s steel import bill by approximately $100 million over its lifetime.

The plant, he said, will allow a portion of the money currently spent on imported steel to remain within the domestic economy through local production, value addition and employment.

The minister also said the facility would strengthen the domestic construction-materials value chain and support downstream industries that rely on steel inputs.

The investment is also expected to contribute to the development of the Musanze Industrial Park as a hub for heavy industry under Rwanda’s second National Strategy for Transformation.

With the domestic market served, the government expects the facility to eventually support exports of steel products to neighbouring countries and other regional markets.

Reviving a history of iron production

ALSO READ: Rising investor confidence fuels development of 10 industrial parks

Maurice Mugabowagahunde, Governor of Northern Province, said the plant represents investors' confidence in Rwanda’s economy and business environment, while creating opportunities for employment, entrepreneurship and technology transfer.

"We believe this factory will contribute meaningfully to construction, infrastructure development, employment, skills development, and the growth of related industries,” he said.

The governor noted that the investment comes at a time when Rwanda is seeking to increase domestic production, promote value addition and create more opportunities for young people.

Mugabowagahunde also urged the company management to maintain strong relations with surrounding communities and ensure that its operations contribute to sustainable development and environmental protection.

The Northern Province governor also linked the new plant to the region’s long history of iron production.

He said historical research and oral tradition indicate that iron production existed in the region centuries ago, with traditional iron products such as weapons and agricultural tools produced locally.

He cited the traditional steel garden hoes known as amasuka y’amaberuka and the iron production museum at Ku Kirenge in Rulindo as examples of the region’s historical connection to iron production.

The inauguration of A1 Iron & Steel, he said, therefore represents not only a modern industrial investment but also a revival, on a much larger scale, of a long-standing tradition of iron production.