Steelmakers call for speeding up infrastructure projects

Steelmakers in Bangladesh have placed a five-point demand to the interim government, which includes accelerating infrastructure development projects, to address ongoing challenges in the industry.

"The government needs to intensify its development efforts to resolve the economic crisis that is affecting all businesses," said Sumon Chowdhury, secretary general of the Bangladesh Steel Manufacturers Association (BSMA).

He made this comment at a press briefing jointly organised by the BSMA, Bangladesh Re-Rolling Mills Association (BRMS) and Bangladesh Steel Mill Owners Association (BSMOA) at the Economic Reporters Forum office in Purana Paltan yesterday.

Chowdhury also urged for increasing the single borrower exposure limit to 30 percent from the existing 15 percent to reduce the capital crunch among investors.

Furthermore, steelmakers demanded uninterrupted gas and power supply on a priority basis for their factories.

Calling for the cancellation of a notification regarding a hike in the certification mark (CM) licence fee of the Bangladesh Standards and Testing Institution, they said the charge should not be based on their turnover.

The industries ministry recently increased the annual CM licence fee to Tk 35 lakh from Tk 15 lakh in what could be a fatal move for local steelmakers, Chowdhury said.

Lastly, duty-free imports of steel products must stop, he added.

Chowdhury informed that steelmakers are facing an increasing shortage of working capital due to the appreciation of the US dollar. And while this has led to a rise in bank borrowing, they are struggling to repay the loans due to higher interest rates at present.

Md Shahidullah, managing director of Metrocem Ispat, said they are selling steel products for far less than the production cost to pay for overhead expenses.

"The steel industry is facing an existential crisis," he added while informing that steel sales decreased by about 40 percent over the past four months.

Md Shajahan, secretary general of the BSMOA, said hundreds of businesses in housing, cement, brickmaking and other industries are directly related to the steel sector.

As such, these businesses are also suffering due to the stagnation in steelmaking, he added.

Md Mahbubur Rashid Jewel, general secretary of the BRMA, said steel production costs are increasing due to the higher fuel oil, gas and electricity prices.

Moreover, the non-availability of gas and electricity are disrupting production and increasing costs, he added.