Bangladesh Steel Re-Rolling Mills (BSRM) Limited has reached a significant milestone by joining the group of listed companies with annual revenues exceeding Tk10,000 crore.
BSRM in Tk10,000 crore sales club
BSRM’s impressive growth is attributed to the government’s mega projects, both completed and ongoing, which have fueled demand for its steel products.
In the fiscal year 2022-23, BSRM reported revenues of Tk11,506 crore, marking a 44% increase from the previous fiscal year. Despite facing challenges such as a shortage of foreign currency, gas price hikes, supply disruptions, and rising raw material costs, the company achieved this remarkable revenue figure.
The Managing Director of BSRM Limited, Aameir Alihussain, attributed the company’s growth to significant government projects in previous years. However, he also noted that in the last year, government projects have slowed down while private sector demand has increased, contributing to the company’s continued success.
Although BSRM achieved its highest-ever revenue in its six-decade history, its profits decreased slightly to Tk291 crore compared to Tk308 crore the previous year. Aameir Alihussain mentioned that inflation and the need to adjust product prices due to economic pressures played a role in achieving record revenue. Additionally, increased inter-company sales and continued demand for their products contributed to this milestone.
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Despite challenges related to the dollar crisis and difficulties in opening letters of credit (LCs) affecting the timely supply of raw materials, BSRM remains committed to growth and maintaining its strong position in the market.
Supplying High-Grade Steel to Mega Projects
Bangladesh Steel Re-Rolling Mills (BSRM) Limited has been at the forefront of supplying high-grade steel to mega projects in Bangladesh. The company has played a crucial role in projects like the Padma Bridge, Rooppur Nuclear Power Plant, Bangabandhu Tunnel, and the Dhaka Elevated Expressway by providing top-quality steel rods.
BSRM Limited introduced graded steel to the country, revolutionizing the steel industry in Bangladesh. It is also the first steel brand in Bangladesh to pass the rigorous 5 million cyclic loading fatigue testing in the UK, ensuring the quality and reliability of its products.
Despite intense competition in the steel sector, BSRM has managed to achieve an impressive 159% growth in revenue over the past five years. This success can be attributed to its commitment to delivering high-quality products and its involvement in major national projects.
Of the four listed companies with annual revenues exceeding Tk10,000 crore, BSRM is the fourth to achieve this milestone. The other three include British American Tobacco Bangladesh Company Limited (BATBC), Titas Gas, and Grameenphone.
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The price of MS Rods increased by approximately 15-17% in the last fiscal year, with steel companies selling them for Tk90,000-94,000 per tonne compared to Tk80,000 a year earlier. However, despite recording record revenue, BSRM Limited couldn’t achieve substantial profit growth due to rising business costs, resulting in a 5.51% decrease in profits compared to the previous fiscal year.
In January, gas prices for captive power plants increased significantly, impacting many industries. The fiscal year began with a loss, with BSRM Limited incurring a loss of Tk168 crore in the first quarter. Despite the initial setback, the company recovered and posted a profit in the subsequent quarters.
The Bangladesh Steel Manufacturers Association (BSMA) reports that the country has an annual demand for 70-75 lakh tonnes of MS rods. Although there are around 55 auto steel re-rolling mills and over 100 semi-auto and manual mills supplying these rods, larger companies like BSRM are gradually reducing import dependence by dominating the market for higher-grade quality steel products.
BSRM’s production of 50mm rods for the Padma Bridge marks a significant achievement, as demand for such rods was met through imports until the 1990s.
BSRM Concerns over Import of Raw Materials
The Bangladesh Steel Re-Rolling Mills (BSRM) Limited is facing challenges in the import of raw materials, despite uninterrupted access to power and gas, according to the company’s secretary, Shekhar Ranjan Kar. The difficulties in opening letters of credit (LC) for importing essential raw materials have created ongoing concerns for the company, indicating that the crisis-free situation is yet to be achieved.
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In its commitment to strengthening its position in the domestic steel market, BSRM plans to expand its annual rolling capacity by 6 lakh tonnes and melting capacity by 2.5 lakh tonnes to meet the growing market demand for high-quality steel products.
At a recent board meeting, BSRM Limited recommended a 25% cash dividend for its shareholders for the last fiscal year. This is a decrease from the 35% cash dividend paid to shareholders in the fiscal year 2021-22. The company’s shares have remained at the floor price of Tk90 each on the Dhaka Stock Exchange since October 2022.
BSRM Limited’s sister concern, BSRM Steels Limited, which is also listed on the stock exchanges, recommended a 25% cash dividend for its shareholders for the last fiscal year. During the fiscal year, BSRM Steels Limited achieved a 26% growth in revenue, reaching Tk8,452 crore, although its net profit decreased by 9% to Tk297 crore compared to the previous year.
Source: The Business Standard
