Small steel millers losing out to biggies

Shamsul Huda | Published: February 26, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Rerolling units are facing closure due to slow demand and competition from big automated steel mills, sector insiders said.
Former president of Bangladesh Steel Mill Owners Association Mizanur Rahman (Babul) said out of 250, more than120 re-rolling mills have been shut down in the last two years while the existing players are making losses.
He said demand for 40 grade-steel rods has declined, forcing the manual re-rolling units to face closure.
He said currently, engineers prefer 60 grade rods and major portion of this product is being produced by large auto rerolling companies.
The former president said troubles in real estate business and slow development work in the country have worsened the fate of both 40 and 60 grade steel producers.
He said slower demand has pushed up stock-piles of products, while also dragged down the prices lower than the original production costs.
BSRM chairman Ali Hossain Akberali said demand for steel rods and other products has fallen by 20 per cent in recent times due to problems in the housing sector and slow development work across country.
Mr Akberali said demand for mild steel and steel rods has come down to 3.6 million tonnes from its earlier 4.5 million tonnes.
He said "We're making losses and three is stock-pile of the manufactured products."
Managing director of Bandar Steel Mills Industries Md Abul Kalam said demand for steel products is slowing because of the political turmoil.
He said "We have curtailed our productions by 30 per cent and production is being hampered due to problems in transporting iron scraps from the ship-breaking yards."
He said the trend of using 60 grade steel products in the construction sector as well as the promotional drive by large investing companies has compounded the problems of small and medium companies.
Mr Kalam said semi-auto rerolling mills, which manufacture 40 grade rods, cannot compete in the market with the products of big companies.
According to a manual steel rerolling mill owner, his business has slumped as he has lost out to the products of big companies.
He said for the last six months, he has stopped production and the factory is weighed down with bank loans. "I am trying to borrow money from banks to manufacture 60 grade rods, which will require fairly large amount," he added.
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