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Steel maker to invest Tk500cr in new plant

Demand from construction will recover

KawsarKhan
Bangladesh Steel Re-Rolling Mills (BSRM) is to invest Tk500 crore in building a new steel mill and a billet factory during the next five years in an effort to double its share of the country's quality steel rod market, a director of the company said.
At present BSRM holds around 12 percent of the market for quality rod, a key material in the construction industry. It is part of the HAkberali Group, and has yearly turnover of around Tk815 crore.
Until this year the rod market had been growing at 8-12 percent a year, although demand has been dampened somewhat in the last 12 months due to weakness in the construction sector and a sharp increase in rod prices.
Aameir Alihussain, director of BSRM, said, "Now the trend is that people construct high rise buildings in Dhaka and Chittagong which is not possible without using quality rod. As the building, of high rise buildings will rise in coming years we want to meet the demand with our product".
The two new factories will be a Tk 260 crore billet factory with a capacity of six lakh tonnes and a steel mill for rod production again costing around Tk 260 crore. Billets are the raw material from which rod is made. Both factories will
be built in Chittagong.
Alihussain made his comments just weeks before the company opens its newTk 370 crore steel factory in Chittagong. The plant will have
an annual production capacity of3.75 tonnes rod.
Currently there are nearly 100 steel mills, 250 re-rolling mills in the country while the total output capacity is 2.4
million tonnes per year. Consumption of quality steel products in Bangladesh is between 1.5-1.6 million tonnes, Alihussain said.
However, company officials identified problems that are undermining growth in the sector, especially the power crisis.
"We are the biggest power consumer in the country and paying around Tk 1.8 crore per month in electricity bills, but the fact is we never get quality electricity," Kazi Anwar Ahmed, general manager of H.Akberali Group, said.
He said that the group's steel production would have been doubled if an uninterrupted supply of power could have been ensured. During the interview the officials of the company also brushed aside the allegations of syndication in the steel market, adding that cost of construction rod is lower than that of India and Pakistan.
"There are around 300 steel and re-rolling mills in Bangladesh, therefore it is not easy to go for syndication," Alihussain said.
He also forecast that the prices of steel raw materials will raise further in upcoming days as the global consumption of steel have shot up and China has imposed extra duty on steel export.
Kawsar@ttiedailystar.net