Business Report :
Leading steel manufacturer BSRM targets local steel market to 34% from 23% now and cater to rising demands for steel products as it sets to launch new $217m steel new plant this month in Chattogram’s Mirsarai by late June or early July with an annual production capacity of 8 lakh tones.
To set up the new re-rolling plant, BSRM secured $50 million in low-cost loans from the Japan International Cooperation Agency (Jica), making it Bangladesh’s first private sector recipient under the Japanese agency’s green industrialisation initiatives.
With the new plant fully operational, boosting BSRM’s total production capacity to 24 lakh tonnes, the steel giant hopes to command more than a third of the country’s steel market.
According to BSRM, the total cost of the new factory construction project is estimated at $217 million (equivalent to Tk2,500 crore). Out of this amount, Jica lent $50 million, with the loan to be repaid over 12 years. The loan agreement was signed on 4 October last year.
Additionally, India’s Export-Import Bank (Exim) has provided a $20 million loan for 12 years; Standard Chartered Bank of Singapore has given $13 million for seven years; and BRAC Bank has loaned $25 million for seven years. All of this credit was given in foreign currency.
Additionally, Prime Bank, Eastern Bank, City Bank, and Infrastructure Development Company Limited (Idcol) extended local currency financing to augment the production capacity of one of BSRM’s melting plants in Mirsarai.
Under this project, a BSRM’s melting plant in Mirsarai had expanded to 7.5 lakh tonnes from 5 lakh tonnes. This expansion commenced in January of this year.
The Bangladesh Steel Re-Rolling Mills Limited (BSRM) and BSRM Steels Limited, both publicly listed, manufacture steel products and raw steel billets.
Currently, the group operates two re-rolling factories in the Nasirabad Industrial Area and Faujdarhat – with a combined production capacity of 16 lakh tonnes of steel annually. The new unit in Mirsarai is also a rolling mill.
In addition, it has four melting factories – two in Chattogram’s Nasirabad industrial area and two in Mirsarai which, with recent upgrades, can produce 24 lakh tonnes of billets, a raw material for steel production, annually.
In addition to producing steel products, the new factory will also manufacture steel wires.
Jica has traditionally provided loans to the government for large-scale projects like the MRT and Matarbari deep sea port. However, in a landmark move, the Japanese aid agency extended loans to BSRM Steel Limited, primarily to support the green factory initiative.
In a statement following the loan agreement last year, Jica said emissions of environmental pollutants and greenhouse gases from steel plants are a significant challenge. This loan aims to help address that issue.
According to BSRM’s corporate booklet, as part of their commitment to the environment, BSRM factories have achieved zero emissions by implementing Japanese Air Pollution Control (APC) systems across all their facilities.
Additionally, BSRM has generated value from dust collection, exporting dust worth $22.6 million since 2015. They have also invested in advanced European Water Treatment Plants (WTP) for their factories, which recycle 373,700 cubic metres of used water with zero wastage.
Furthermore, BSRM converts 120,000 tonnes of slag waste generated annually at their steel plant into eco-friendly construction material as an alternative to bricks. For this initiative, BSRM received the “SDG Brand Champion Awards 2023”.