Foreign firms’ finished steel product imports must be taxed

Local steel building makers yesterday urged the government to impose a duty on the import of finished steel products by foreign companies to safeguard the domestic industry.

They also wanted the introduction of a uniform duty on the import of pre-fabricated raw materials of steel building products in the final budget for the incoming fiscal year.

The Steel Building Manufacturers Association (SBMA) of Bangladesh made the demands through a virtual post-budget press conference from its office on Pragati Sarani in Dhaka.

The duty-free benefit, which foreign companies enjoy for import of finished steel products for the establishment of factories inside economic zones, should be withdrawn, said Jowher Rizvi, SBMA president.

They bring in steel products from abroad although local manufacturers have been producing such products of global standards inside Bangladesh for a long time, he said.

Some foreign companies have been importing surplus finished steel goods exploiting the duty-free benefit and supplying those products to the open market, creating unfair competition for the local manufacturers, he said.

There are 30 local prefabricated or infrastructure steel makers in Bangladesh, each manufacturing specific items and directly contributing to the country's infrastructure development.

"If the situation continues for a long time, it will be tough for the local steel manufacturers to survive. So, we urge the government to withdraw the duty benefit and allow us to import steel raw materials with zero duty."

Local industries are providing necessary infrastructure material to the government and the private sector and helping them to save a lot of time and money.

"We can meet the entire country's demand."

The industry for raw materials of prefabricated steel building has suffered a significant financial loss due to the outbreak of coronavirus as 95 per cent of the industrial raw materials are imported from China, Rizvi said.

According to SBMA, the rapidly growing prefabricated sector faced severe challenges due to the postponement of infrastructure development work and failing to recover bills of completed projects due to the pandemic.

The prefabricated sector had been annually growing on an average of 15 to 20 per cent in the last 10 years and is now a Tk 4,500 crore-market, up from Tk 2,000 crore a decade ago, according to SBMA.

The country's annual demand for prefabricated steel is about 10 lakh tonnes and local manufacturers could manufacture only 4 to 5 lakh tonnes. "The rest comes from India, China, Australia, Japan, Korea and Taiwan."

Steel infrastructure began to show up in Bangladesh in 1985, with the components being initially imported.

In 2001, local entrepreneurs first took up the initiative to build steel infrastructure by themselves, according to industry insiders.

The commercial importers pay 5 per cent customs duty for the import of raw materials of steel goods, whereas the rate hits 25 per cent for local steel manufacturers, said Md Rashed Khan, general secretary of SBMA.

"This duty disparity is not good for the overall industry. That is why we wanted a uniform duty structure for the import of raw material for prefabricated industry."

The customs duty for local manufacturers should be less than what the commercial importers pay for the sake of the country's industrialisation, he said.