Mostafa-Hakim Group expands steel production capacity

Mostafa-Hakim Group yesterday launched a new MS rod production facility to expand its annual production capacity by 4 lakh tonnes.

The move comes just four years after the company set up its first fully-automated rebar manufacturing unit called Golden Ispat.

The group invested Tk 1,000 crore, including Tk 700 crore from United Commercial Bank, to establish the new unit, HM Steel and Industries, in Chattogram's Karnaphuli upazila.

Land Minister Saifuzzaman Chowdhury inaugurated the plant through a ceremony chaired by Mohamad Manjur Alam, managing director of Mostafa-Hakim Group and former mayor of Chattogram City Corporation (CCC).

Alam, now the chairman of HM Steel and Industries as well, said Mostafa-Hakim Group currently employs around 4,000 people while the new plant would create jobs for 1,500 more.

The group began its journey with ship breaking in the early '80s before stepping into the steel industry in 1984 with a manual rod production plant named Golden Iron. It then set up a semi-automated mill called Golden Steel in 1987.

But after a long gap, the group established Golden Ispat in 2017.

Over the last few decades, the Chattogram-based conglomerate has also invested in a number of ventures, including cement, oxygen, textiles, real estate and bricks, according to Mohamad Sarwar Alam, director of Mostafa-Hakim Group.

"A good response for the quality products of Golden Ispat as well as increasing domestic demand for steel encouraged this expansion," he added.

HM Steel has the capacity to produce 4 lakh tonnes of billet, the semi-finished product, to produce MS rods, angles, square bars, flat bars and channels.

Golden Ispat has the capacity to produce 2 lakh tonnes annually. So far, its share of the country's total production capacity of 8 million tonnes is only 2.5 per cent.

Bangladesh Steel Re-Rolling Mills (BSRM), which has two units and  can produce a combined 1.6 million tonnes of MS rod each year, currently leads the market.

BSRM is followed by Abul Khair Steel with 1.3 million tonnes, GPH with 0.9 million tonnes and KSRM with 0.6 million tonnes.

Although GPH recently expanded its capacity to 0.9 million tonnes, it is yet to go for full production and has kept the limit at 0.5 million tonnes, according to market insiders.

Over 140 steel factories of varying sizes are currently in operation.

However, the local demand stands at 6.5 million tonnes per year against an annual production capacity of 8 million tonnes.

Alam, also a director of the newly constructed HM Steel, said local demand increases every day.

The country's per capita steel consumption has doubled in the last few years and there is still a huge scope of rural and overall infrastructural development.

The government has also taken a number of mega projects which would need more steel in the coming years, Alam said.

With the new plant, the group's MS rod production capacity would reach 6 lakh tonnes.

"Our two units would combinedly contribute 7.5 to 8 per cent of the country's total capacity," Alam added.