Bangladesh: BSRM's $175 million expansion project to boost steel manufacturing in the country

BSRM, Bangladesh's largest steel manufacturer, announced a significant investment of BDT 1,900 crore (approx. $175 million) to set up a second re-rolling plant. The expansion aims to meet the rising demand for steel in public and private construction projects within the country.

Expansion project details: The expansion project includes the establishment of a melting furnace unit, which will increase the billet-making capacity by 2.5 lakh tonnes, and a re-rolling unit that will augment the annual capacity by 6 lakh tonnes. Upon completion, BSRM's total steel production capacity in Chattogram will reach approximately 24 lakh tonnes, accounting for nearly 25% of the nation's entire steel production capacity.

Rising steel demand:Bangladesh's robust infrastructure development, supported by official development assistance and other funding sources, necessitates significant steel products, especially in sectors like metros, airports, and commercial facilities. The demand for steel in Bangladesh is projected to increase at an annual rate of 15-20%, emphasising the strategic significance of this expansion. The project is expected to commence operations by mid-2024, with the billet plant already in operation since June. BSRM's growth will reduce the nation's dependence on steel imports and contribute to a more eco-friendly steel industry.

International financing: To finance this project, BSRM secured $108 million from international financiers, with the Japan International Cooperation Agency (JICA) contributing $50 million. Moreover, local financiers will provide BDT 800 crore (around $80 million) in local currency. This project aligns with the expected growth of Bangladesh's economy and the subsequent demand for steel in various sectors. It emphasises the resilience of the nation's economy despite temporary challenges. JICA's involvement marks its first foray into private-sector financing in Bangladesh, highlighting its belief in the country's future. The co-financing arrangement among JICA, Standard Chartered Bank, and the Export-Import Bank of India represents an innovative approach in fostering private sector growth. The commitment from JICA signifies their trust in BSRM's governance and compliance. The project underscores its commitment to environmental sustainability by incorporating solar power generation, air pollutant management systems, and water treatment and reuse facilities.

Economic growth boost: The project aims to bolster Bangladesh's economic growth and reduce its trade imbalance resulting from steel imports. The introduction of solar power, air pollutant management, and water treatment facilities will promote environmental sustainability and reduce greenhouse gas emissions in Bangladesh's steel industry.

BSRM's market presence: BSRM Steels already operates a rolling plant at Fouzderhat Industrial Estate and two billet plants at Nasirabad Industrial Estate and Mirsharai. The company reported a 26% increase in revenue, reaching BDT 8,452 crore during the fiscal year 2022-23, compared to the previous year, underscoring its growth and market presence.