Poor development work by the government and downtrend in private investments have thrown mild steel (MS) rod millers' business into an uncertainty, industry insiders said.
Bangladesh's annual demand for quality rod is estimated at more than 2.5 million tonnes, of which the millers sell more than 80 per cent in peak season (October-April period). But the manufacturers claimed that many of their fellow businessmen could not even start their seasonal sales.
"We are used to see large gathering of dealers and retailers in our office during October-December period every year. But this year their number is less", an executive director (ED) of Abul Khair Steel Mills Ltd. told the FE Saturday.
"Our official study showed most of the wholesalers and retailers have been passing idle times due to such situation. Thousands of workers and staffs of rod factories and sales outlets across the country have found themselves in a kind of uncertainty apprehending job loss due to the prevailing situation," he added.
Md Kadam Rasul, a wholesaler in the city's English Road area said a huge volume of MS rod remained unsold in his godown for the last one year as he could not sell those mainly due to the political turmoil last year.
"We stock basic construction materials in godowns during dull season to get better price which we usually sell in peak season. But we are yet to clear last years stock for want of customers," he added.
Kadam Rasul also informed that many of his customers were involved in with housing business, but for the last two years such kind of customers did not purchase even ten per cent of their usual consumption.
President of Bangladesh Auto Re-Rolling and Steel Mills Association, Sheikh Masadul Alam Masud said the government's slow moving policy of implementation of its annual development plans and poor investment in the private sector have thrown hundreds of re-rolling businessmen and their thousands of dependants to an uncertain future.
"I will urge the government to normalise project funding and implementation of its annual development plan as soon as possible along with lowering interest on bank loans and also liberalise foreign direct investment (FDI in the country with a view to bringing normalcy in business activities," he added.
The association leaders also said any kind of harm to the sector will affect a number of other industries.
"Following the poor demand of MS rods, import of old ships for scrapping has drastically fallen this year", Masud informed.
According to him, import of old ships fell by nearly 35 per cent in the last financial year (FY-2013-14).
"Local importers purchased old ships worth 1.9 million tonnes in the last financial year (FY-2013-14) against import of ships worth 2.35 million tonnes in the previous year (FY-2012-13) and 2.72 million tonnes in the FY-2011-12. It is a clear indication of the bad situation", he added.
However, according to market sources of the capital's English Road, per tonne 60-grade MS rod is now selling at Tk 56,000 and 40-grade rod at Tk 47,000 against Tk 50,000 in the retail market.
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