At BSRM we sleep steel, drink steel...talk steel'. That is how Mr. Alihussain Akberali, chairman of the Bangladesh Steel and Re-rolling Mills (BSRM), a public limited company and a leading producer of steel in the country, summed up their style of doing business, in an exclusive interview with The Financial Express. Following are excerpts of the interview:
Question (Q)1: Chittagong, with its past record of vibrant industrial and commercial activities, should have played a major role in achieving nation's vision of becoming an upper middle-income country by 2021. Unfortunately, this is not happening. Please comment.
Answer (A): Main reason for this is lack of infrastructural support. The govt for past many years could not visualise that we will need LNG and we will need to increase the port capacity. Both have been missed out. Furthermore due to non-digitalisation of the land records, the buying of land has become a nightmare and this is one of the major reasons for delay in setting up industries. Even govt is reluctant to allow the purchase of khas land located in the middle of our own plots which make things worse.
We are being obstructed in using agricultural and 'tilla' land to set up industries whereas economic zones are being set up partly on agricultural lands acquired by the govt. economic zones will take a few more years to be ready. So, until then should we sit and let our country not grow?
Q 2: Experts, economists and corporate houses say Chittagong, with the country's major seaport and heavy industries, has huge economic potentials to be grown as the commercial capital in true sense of the term. But these potentials remain untapped. Why?
A: I have stated earlier the main reason. Another major reason is lack of support from the law enforcing agencies when we are confronted with local problems. Presently, we are paying a substantial amount as demurrage and locally we are having huge problems in taking deliveries from the Sadarghat area and we are helpless when local mastans rob away our goods in front of our eyes and also come to us to our own goods in trucks!!!
Q 3: Gas crisis is the biggest barrier to Chittagong's progress. But new gas source for Ctg is a distant dream. Where, according to you, lies the solution?
A: Govt should immediately give demand notice with time frame when the gas will be delivered to all industries that have applied for LNG. Govt has planned for LNG in a big way. It is high time the govt take a pragmatic decision and give demand notice to all aspirants of gas in the Chittagong area so that planning for new industries can take place immediately. It is perfectly alright if demand note is given for extended delivery periods. If we wait for gas demand note which may take another year for additional gas then no one will put his money in such units at this stage.
For instance we want to set up a LNG based gas power plant at Mirsarai area. But gas company cannot give us a demand note even for delivery after one or one and a half years. Thus we are sitting arms folded praying that when gas will come, govt will issue demand notice and then we can start our project which will thus take another 3 years.
I feel govt should take the challenge of issuing demand notice now only with confirmed delivery period because they too have penalty clauses with the suppliers of LNG and thus such penalty can also be paid to those whom govt has given demand note and cannot give gas. Take 6 months more but give demand notice now so that on the strength of such gas demand note we can start the project now only and thus start our project.
It is further amazing no gas prices are being given to us for delivery after one year!!! What is stopping the govt from giving the minimum gas price that they will charge us and issue a demand note and we can check if project is viable and get such project started if we find the prices suitable? Keeping us this in suspense on this gas price issue is really peculiar.
Q4: Chittagong has a proud heritage of the art of steel making as it owned the largest steel mill of Pakistan, established in 1967. Now top three steel plants of the country supply more than half of the national demand of an estimated market size of Tk 300 billion while the sector is experiencing an upsurge in demand. Please comment.
A: Local steel producers today can meet the entire demand of steel in the country. The sector has the state-of-the art steel plants and even Pakistan, Nepal, Sri Lanka do not have mills like those of Bangladesh. Today our steel mills can compete with Tata in terms of quality. We are proud to say that our local companies are supplying to all local projects.
In Bangladesh, investments worth billions of taka have been made in the steel sector. But, unfortunately, govt is allowing duty free imports of steel for a number of projects. we have written to our Minister of Finance and the NBR (National Board of Revenue) explaining how govt will lose nearly Tk. 5.17 billion by giving duty free import of re-bars for just three projects.
If duty-free import is not stopped our steel plants will be in serious financial problems. Already we are seeing downward trend in demand.
Q5: Consumption of graded steel is considered an important indicator for the advancement of the national economy. You are very proud to have been associated with most of the major infrastructure projects of the government with the longest lasting steel. Please elaborate.
A: As already stated above under 4 BD mills are producing the best quality steels in the country and that is the reason why most of the large projects are buying from us. It is only the Chinese projects mainly that are allowed duty free access of rods and that too the govt is going to bear the duty and sometimes deferred payment is also allowed for duty payments.
The BSRM steel has introduced many products like country's first fusion bonded epoxy coated (FBEC) rebar for mega infrastructure projects and ultima, the earthquake resistant steel.
We have introduced epoxy coated bars which will increase the longevity of large long term projects like bridges and also the coastal area projects. I feel this development will add huge value to our construction in terms of longevity.
Q6: The BSRM achieved four milestones of success in 2016 including the president's award for best industrial enterprise of the nation. How it all happened?
A: We bow our heads before God whose support to our family for the past 65 years in steel business has been tremendous. I also owe our success to our family, dedicated team of workers, staffs, engineers, managers and executive directors all of whom are dedicated and honestly supporting our mission and vision.
Plus I strongly believe in the fact that there is no short cut to success and there is no alternative to hard work.
Q7: Chittagong port with lack of adequate handling equipment remains a headache for the businesses and industries. It is learnt the BSRM group has resorted to alternative jetties at Sadarghat for unloading of cargo. Please explain.
A: The port problems has become a nightmare. Our company alone have lost nearly Tk 600 million in demurrage just because of port congestion. Sadarghat jetty is no option at all. The CPA failed to understand the gravity of the situation and also failed in getting the Bay terminal works started. We believe the Bay terminal also will only handle 1.0 million tonnes of bulk cargo and the rest is all container cargo. so we do not see any solution to this menace. Who will bear the extra demurrage we are paying? It is the customers, of course. Valuable foreign exchange is being drained out of our national exchequer.
Four Jetties at Sadarghat have been built by the CPA for the past 3 years and just because of some dispute with some Chinese party the CPA could not start these jetties and so also in such huge crisis no action is seen in place.
I strongly suggest the govt should allow CPA to build the Bay terminal and the Sitakaunda jetty on war footing bypassing normal procurement procedures like govt has given to the rental power projects establishment. For past many years we are hearing on the Bay terminal. May god save our country. it seems we do not want development and no one is serious about Chittagong's development.
Q8: The BSRM shareholders in the recent AGM spoke highly of your leadership in guiding and building such a giant company very successfully. What are the key components that contributed to the success of your business?
A: It is just hard work and dedication. we sleep steel, drink steel, dream steel and talk steel. We are dedicated to this business and of course owe our success to the banking and govt sectors who all along have supported us. For customs, power, tax and VAT department, BSRM has high regards and never we have been subjected to harassment. This is relieving factor for us.
Q9: As businesses are facing severe traffic congestion on the Dhaka-Chittagong highway, the elevated expressway as a multimodal transport corridor becomes a dire necessity of the time to boost trade. But it's being delayed. Will you please comment?
A: We all know of the huge traffic loads on the highway. Interestingly the highway should have been developed and built to take loads of min 40 tonnes with trailer or trucks and thus the congestion on the roads would have been half!!! Lesser no of trucks and trailers would be plying. I feel the govt needs to think seriously on this aspect. They can consider building a RCC road and give to some private international contractors and they can take toll to cover the RCC road costs in say 20 years or so. Even if the toll is Tk. 200 per tonne still it will be worthwhile for govt to plan for this road into a RCC road. this will thus solve the problems and elevated expressway may not be needed. The entire road can be built by 6/10 leading international and local contractors and in one year or so the same can be completed. Heavy penalties in the shape of bank guarantees can be imposed for delays. No one should be spared for delays.
Elevated expressway are being talked for the past many years. But no light is seen. Govt in the first place needs to clear the land if there is any problem. But if it is made in the centre of the present highway no issue will come. However, the issue of easy and unhindered entry into Dhaka and Chittagong has to be looked into simultaneously.
Just imagine, a connecting road from Bayzid Bostami to the highway is pending for the past 4 years !!! Even the bridge made about 4 years ago will have to be re-done since the highway now under construction will prove useless if the bridge is not widened.
I sincerely hope the above points will highlight the plight of industries. Under such circumstances only labour intensive industries will find it way to Bangladesh but no other foreign companies will come to our country. Of course this is an indirect blessing for us that we will not face competition with the giants!!!
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