BSRM, Bangladesh’s largest steel manufacturer, has embarked on an ambitious project worth nearly Tk 1,900 crore to establish its second re-rolling plant. The goal is to expand production capacity to meet the growing demand for construction in the public and private sectors in the country.
As part of this initiative, BSRM is setting up a melting furnace unit to boost its billet-making capacity by 2.5 lakh tonnes and a re-rolling unit to increase its capacity by 6 lakh tonnes per year. These facilities will be located at the BSRM Industrial Estate in Mirsarai, Chattogram.
Upon completion of this expansion, the total steel production capacity of BSRM will reach approximately 24 lakh tonnes per year by next year. This represents nearly one-fourth of the country’s total steel-making capacity, according to two senior BSRM officials.
Aameir Alihussain, Managing Director of BSRM Group, explained the rationale behind this expansion, stating, “We expect the demand for steel will grow in line with the growth of our economy. Temporarily, we are facing some problems in our economy. But our economy has resilience, and it will recover. This is why we are expanding our capacity.”
BSRM has garnered support from international financiers, including the Japan International Cooperation Agency (JICA), as well as local and foreign banks to realize this production capacity expansion.
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Out of the 5 million project cost, BSRM will receive 8 million from international financiers, with million coming from JICA. The remaining project cost of Tk 800 crore will be covered by loans from local financiers in the form of the local currency, taka.
Notably, this marks JICA’s first private sector financing endeavor in Bangladesh, signifying their confidence in the future of the country, as expressed by Alihussain.
JICA stated that this loan will support the construction of an environmentally friendly steel plant by BSRM. The financing aims to promote environmental sustainability and reduce greenhouse gas emissions in Bangladesh’s steel industry by introducing solar power generation facilities, air pollutant management systems, and water treatment and reuse plants as ancillary facilities.
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JICA also highlighted the significant infrastructure developments in Bangladesh, such as metros, airports, and harbors, driven by Japan’s official development assistance and other funding sources. The demand for steel products, especially rebar, is expected to grow in Bangladesh, with an annual growth rate of 15-20 percent.
Standard Chartered Bank is serving as the sole mandated lead arranger, structuring and coordinating bank for the US dollar syndicated loan and agent. Meghna Bank Limited and NRB Commercial Bank Limited are providing guarantees against the finance from Idcol.
The commissioning of the second re-rolling plant is anticipated to commence from March-April next year, according to Tapan Sengupta, Deputy Managing Director of BSRM.
