BSRM to set up wire plant for Tk 459cr

BSRM Group is set to establish a wire manufacturing plant at Mirsarai in Chattogram at a cost of Tk 459 crore as the country's leading steel manufacturer looks to capitalise on the impending construction boom in Bangladesh.

To be christened BSRM Wires, the new concern of the port city-based business group will manufacture four types of wires that are currently imported, said Alihussain Akberali, chairman of BSRM Group.

“The steel industry is booming thanks to the mega projects that the government has set in motion.”

The prices of raw materials of wires are very low in the international market but the prices of the finished goods end up being high for Bangladesh due to imports, he said.

“Local manufacturing will reduce their prices,” he said, adding that the plant is expected to roll from next year.

The plant is being implemented with 70 percent bank financing and 30 percent equity investment.

“To make the plant viable we decided not to take bank financing of more than 70 percent,” Akberali added.

BSRM has already raised Tk 321 crore from different banks, with the rest being equity investment.

Dhaka Bank arranged the fund through syndication with six other banks -- Bank Asia, City, NCC, Modhumoti and Mercantile -- and one financial institution, the Saudi-Bangladesh Industrial and Agricultural Investment Company.

The banks have invested in the project as it would have a direct impact on the economy, said Syed Mahbubur Rahman, managing director of Dhaka Bank.

“The project has good prospects,” he added. 

The plant will create job opportunities for 400 people, bringing the group's number of total employees to 4,700.

The plant will have the capacity to manufacture 77,000 tonnes of wires a year, which would be a combination of galvanised wire, LRPC wire, welding electrode and CO2 wire, according to project proposal.

Galvanised wire is used in cable manufacturing in the form of chain link fence. LRPC wire is used in pre-stressed concrete girders for construction sectors. Welding electrode is used for gas metal arc welding or shielded metal and CO2 wire is used to weld shipbuilding steel. BSRM currently has a plant at Nasirabad in Chattogram that manufactures wire rod.

The production capacity of the plant, which is the first and only company to manufacture high-strength reinforcement wires in Bangladesh, is 24,000 tonnes of wire rod. Considering the demand for the products, the group has decided to set up a new factory with some diversified product lines, said the project proposal.

BSRM Group logged in profit of Tk 602 crore in the financial year 2017-18. Its turnover was Tk 12,841 crore.

The business group has total liabilities of Tk 9,589 crore in the market against which its total asset value is Tk 13,466 crore. Currently, two companies of BSRM -- Bangladesh Steel Re-Rolling Mills and BSRM Steels -- are listed on the Dhaka Stock Exchange.

Bangladesh Steel Re-Rolling Mills traded above Tk 70 in the last one month and BSRM Steels at more than Tk 60, according to data from the DSE.