April 12, 2024, 5:56 pm

Country’s steel cos to invest for boosting business

  • Update Time : Tuesday, September 20, 2022
  • 135 Time View

Swarnomoyee Mostafa Oishy

Country’s steel companies are tending to invest in this sector to boost business as the government infrastructural development projects besides the private projects are progressing fast.

The implementation of many infrastructural development projects including Padma Bridge, Rooppur Nuclear Power Plant, Karnaphuli Tunnel, construction of Metrorail, flyover, bridge, four-lane highway, Metrorail, elevated expressway, construction of sea port economic zone is increasing. Apart from this, private enterprises are building industrial and housing projects. As a result, companies are constantly increasing the production capacity of steel. Many companies are investing in setting up modern technology-rich factories.

Among such good news, there is bad news that, most of the large and medium sized steel companies in the country are showing disinterest to get enlisted in the capital market.

Though, there are more than 250 steel factories in the country currently, only 20-25 companies are highly active. Of them, only seven companies in the steel sector namely SS Steel, RSRS, GPH Steel, Bangladesh Steel Re-Rolling Mills Limited, BSRM Steel, Apollo Ispat Limited and S Alam Cold Roll Steel Limited are listed in the capital market. Rest large and medium-sized factories including AKS, KSRM, Sheema Automatic Re-Rolling Mills, Anwar Ispat, Golden Ispat are reluctant to list in the capital market. In this situation, there is needed unified effort to bring all the companies in the list of capital market.

Bangladesh is self-sufficient in production of steel products. The companies in the steel sector have an annual production capacity of eight million metric tons.

According to related sources and Dhaka Stock Exchange sources, a total of seven companies in the steel sector are listed in the main capital markets of the country. Latest, the SS Steel Limited was enlisted in the stock market on January 17 in 2019. Earlier, Ratanpur Steel Re-Rolling Mills Limited (RSRS), GPH Ispat Limited, Bangladesh Steel Re-Rolling Mills Limited, BSRM Steel, Apollo Ispat Limited and S Alam Cold Roll Steel Limited were enlisted. Although, there are currently 250 steel factories in the country, only 20-25 steel companies are active. On the other hand, there are several good steel manufacturing companies of large and medium quality in the country. But these institutions have not been listed in the capital market for a long time or are showing disinterest.

Abul Khair Steel is a subsidiary of Abul Khair Group, the largest steel producer in the country based in Chattogram. Annual production capacity of this institution is 14 lakh metric tons. KSRM, a subsidiary of Kabir Group of Industries, has an annual production capacity of eight lakh metric tons. The situation is the same with Biozid Steel, Sheema Automatic Re-Rolling Mills Limited, Sheema Steel, Golden Ispat Limited, HM Steel, Sheetalpur Steel, Rahim Steel, Chakladar Steel, Ambia Steel, Shahriar Steel, Islam Steel and several other steel companies.

Investors in this sector said that, two types of products are produced in the steel industry. These included flat steel (CI sheet and CR coil) and long steel (MS rod/TMT bar). More than 250 companies are active in this sector. The combined steel product production capacity of these mills is about 80 lakh tons. In contrast, the annual demand is about 50 lakh tons. However, in the current economic downturn, the demand is less than 3 million. However, the top five institutions meet more than half of the total demand. Among these companies are Abul Khair Steel, BSRM, GPH Ispat Limited and KSRM. Among these, Abul Khair Steel Re-Rolling Mills stands at the top of the steel sector as a single company. The company has an annual production capacity of 14 lakh tons in long steel. Besides, the combined annual production of BSRM Group companies is 14 lakh tons. And GPH Ispat Limited has an annual production capacity of 10 lakh metric tons, Kabir Steel Re-Rolling Mill has an annual production capacity of 8 lakh metric tons, Ratanpur Steel Re-Rolling Mills (RSRM) Limited has an annual production capacity of 1.87 lakh tons.

According to the stakeholders, currently the country’s steel market is around Tk 40,000 crores. So far, 40 percent of the demand is behind the government’s development efforts.

Meanwhile, the annual production capacity is about 8 million metric tons, but so far the demand is about half. However, in the future, the work of many projects including elevated expressway, tunnel, small and big bridges, industrial facilities will speed up. Apart from this, if the housing sector is strong and exports to the seven sister states of India increase, the demand for steel would reach to 1.80 crore tons by 2030. There is a chance to increase the growth of steel industry from the current 5 percent to 15 percent. Keeping these possibilities in mind, GPH Ispat started working on major commercial expansion to increase competitiveness a couple of years ago. Besides, several companies including BSRM, Bashundhara Steel, McDonald Steel, Anwar Ispat are investing.

Mamun Uddin, Managing Director of Sheema Automatic Re-Rolling Mills Limited told that, “The country’s steel sector has a lot of potential. Our per capita consumption of steel is low. This use will increase. Apart from this, there is an opportunity to export to many countries in China, Korea and Africa including the seven sister states of India. We have started the capital market listing process to exploit all such possibilities. Enrollment will provide multiple benefits including tax exemptions.”

 

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