BSRM Steels is going to launch its new plant at Mirsarai in January next year of an annual production capacity of 0.6 million tonnes of MS (Mild Steel) Rods, with an expectation for revenue boost.
The country's largest steel manufacturer builds the new re-rolling mills at the cost of around $217 million, aiming to raise its share in the local steel market from 23 per cent to 34 per cent.
In a stock exchange filing on Wednesday, the Chattogram-based steel manufacturer said the board of directors had decided to start commercial operation of the plant on January 1 next year.
With the new plant fully operational, BSRM Steel's production capacity will reach 2.2 million tonnes.
Japan International Cooperation Agency (JICA) and Infrastructure Development Company Limited (IDCOL) are major financiers. BSRM Steel secured $50 million in loan from JICA, which will have to be paid back in 12 years.
India's Export-Import Bank (Exim) has also provided a loan of $20 million for 12 years, while Standard Chartered Bank of Singapore $13 million for seven years, and BRAC Bank $25 million for seven years. All of the credits were given in foreign currency.
Prime Bank, Eastern Bank, and The City Bank are other financiers.
BSRM Group's two companies -- Bangladesh Steel Re-Rolling Mills (BSRM) and BSRM Steels (both publicly listed) -- manufacture steel products and raw steel billets.
Currently, the group operates two re-rolling factories in Nasirabad Industrial Area and Faujdarhat, with a combined production capacity of 1.6 million tonnes of steel annually. The new unit in Mirsarai is also a re-rolling mill.
BSRM Steels performance in Q1
It secured a 23 per cent year-on-year growth in profit to Tk 560 million in the first quarter through September of FY25, riding on higher sales and cooling down of raw materials' prices in the global market.
The steel manufacturer's earnings per share (EPS) stood at Tk 2.26 for July-September this year, up from Tk 1.21 for the same quarter a year before, according to a stock exchange filing on Wednesday.
Sales grew 3 per cent year-on-year to Tk 15.24 billion in the quarter while net finance costs fell 45 per cent year-on-year to Tk 520 million as the foreign exchange rate attained stability.
Higher sales and significantly lower finance costs, largely due to low impact from local currency devaluation, helped the company secure a profit growth.
Foreign currency losses declined significantly to Tk 43 million in July-September from Tk 615 million in the same period a year earlier.
The cost of sales, which includes all associated costs to produce steel, stood at Tk 12.86 billion, 84 per cent of the total revenue earned in July-September quarter this year, down from 87 per cent of the revenue in the same quarter of the previous year.
The net operating cash flow per share, a measure of a company's ability to generate cash from its operations, rose to Tk 5.13 per share from Tk 4.86 in the previous year, driven by higher sales, increased collections from receivables and reduced finance costs.
Bangladesh Steel Re-rolling Mills' performance in Q1
Bangladesh Steel Re-rolling Mills reported that its consolidated profit jumped 71 per cent year-on-year to Tk 1.12 billion in the July-September quarter of this year, although revenue slid 5.8 per cent to Tk 19.05 billion.
The net profit rose mainly for cheaper raw materials. The purchase of low-priced raw materials last year brought down spending on raw materials this year, said the company.
While the cost of sales was cut by 11 per cent year-on-year to Tk 1.28 billion, its selling and distribution costs soared 80 per cent year-on-year to Tk 471 million during the quarter.
The company explained that to increase sales it paid additional brokerage and commission fees during the quarter, which drove up selling and distribution expenses.
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