CR coil makers oppose duty cut on import of finished products

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Shamsul Huda
Despite providing all types of supports to the growing cold rolled (CR) coil industry the government has moved to relax duty on import of finished products, threatening investments of millions of dollars, according to sources.
Bangladesh CR Coil Manufacturers and Exporters Association President Khalilur Rahman said though the government has reduced tariff on import of raw materials, the industries minister's issuance of a letter to the National Board of Revenue (NBR) to reduce duty favouring import is a matter of double standard.
"If the minister's proposal finally comes into effect, it will be a threat to more than Tk 80 billion investments of our entrepreneurs," he said.
He said a number of traders are already importing CR coils by under-invoicing and they are selling the same in less price than that of the locally manufactured ones.
He said every year on an average 0.1 million tonnes of CR coils are being imported by showing lower import prices to the customs and thus the importers are making the market uneven.
Mr Khalil said the NBR last year reduced taxes on some industrial raw materials in a new tariff structure to help local manufacturers but if the current move by the ministry of industries comes into effect, it will destroy the local industries.
He said currently some seven CR coil industries are producing more than 0.5 million tonnes of coils for the domestic market and they are also exporting more than 0.2 million tonnes by adding 40 per cent export value.
In Bangladesh CR coils are by the by-products of hot rolled (HR) coils. And galvanised plain sheets and corrugated iron (CI) sheets (tin) are being manufactured from CR coils.
Some 90 per cent of the basic raw materials for making CI sheets, window, door, steel cupboard, ceiling fan and tube light box come from locally produced CR coils.
Before the establishment of this industry Bangladesh had to depend fully on import of HR and CR coils.
Mr Khalil, also President of Chittagong Metropolitan Chamber of Commerce and Industry (CMCCI), said the local mills are now saving millions of dollars and have created job opportunities for thousands of people in the country by providing dealership for CI sheets and other products.
"Demand for our products in the local market is rising every day. Our export is also growing every year with a good value addition. But if the recent move by the industries minister in favour of the importers comes into effect, it will become as disaster for this sector".
Kazi Salahuddin, general manager of the Galco Steel (BD) Limited, said earlier they were facing uneven competition in the market but the government's initiative of reducing tariff on import of raw materials has saved them. But if the importers are benefited again, then situation will be worse like before.
He said currently the importers need to pay 25 per cent duty and 10 per cent supplementary duty.
He said as the local mills are capable of meeting domestic demand, import is not necessary.
He suggested continuation of the current duty and supplement structure on import of finished CR coil products for the sake of local mills to flourish.