GPH Ispat signs deal with a foreign firm for expansion

GPH Ispat has signed a deal with Primetals Technologies Austria, a joint venture of Siemens and Mitsubishi Heavy Industries & Partners, for its planned large-scale expansion.

Under the deal, Primetals will provide ultra-modern long-steel technology and supply necessary machinery for the expansion of GPH Ispat, which will invest about Tk 1,700 crore for its production capacity enhancement.

Mohammed Jahangir Alam, managing director of GPH Ispat, and Heiner Roehrl, chief executive of Primetals Technologies, signed the deal on behalf of their organisations in Dhaka on Tuesday.

The technology that GPH Ispat will use in its expansion project will be the first of its kind in Bangladesh as well as in Asia, Alam said.

The technology will not only ensure world-class products but also reduce the use of gas and electricity during production, he said at the signing ceremony.

After the implementation of the project, the steel maker's yearly production capacity of MS billet will reach 10.08 lakh tonnes from 1.68 lakh tonnes now.

In line with the expansion, the yearly production of MS rod and medium-section products such as steel beam, angle, channel and flat bar will also increase by 6.40 lakh tonnes, in addition to the existing annual capacity of 1.20 lakh tonnes.

The expansion project will create employment opportunities for 750 people directly, 300 on a contractual basis and 8,000 people indirectly.

After the completion of the project, the steel maker will contribute an additional Tk 245 crore to the government exchequer by way of corporate tax, value-added tax, customs duty and so on.

Listed on the stock exchanges in 2012, each share of GPH Ispat traded between Tk 51 and Tk 55.6 on the premier bourse yesterday before closing at Tk 55.5.

Sponsors hold 59.65 percent stakes in GPH Ispat, institutions 14.43 percent and general investors the remaining 25.92 percent.