Steel exports shine
Bangladesh has emerged as a competitor to major steel-making countries Japan, South Korea, Brazil, Russia and India with strongholds in African markets, thanks to the country's low production cost and high quality of the items.
About 85,000 tonnes of steel products, mainly corrugated iron (CI) and galvanised plain (GP) sheets, were exported to the African countries last year, industry insiders say.
“The advantage Bangladeshi manufacturers enjoyed is production costs, significantly lower than in Japan or India,” said Hefazatur Rahman, deputy general manager of PHP Steels Ltd that exports 20,000 tonnes of steel products a year.
When Bangladesh is nearly similar to Japan and better than India in the quality of products, the production cost is much lower, Rahman said.
Bangladesh can sell CI sheet at $650 a tonne and GP sheet at $700, while the Japanese rates are $800 and $950 and Indian rates $750 and $800 respectively.
On the quality of locally-made steel products, Rahman pointed to the imports of raw materials and machines mainly from Japan, which helped maintain the quality the same as Japan's.
A top official of another exporting company said Bangladesh has been exporting GP sheet and CI sheet to Africa through some third party brokers in Singapore since 1993.
Now the number of steel item makers and exporters is six, while the export destinations are 24 African countries where China, Brazil, Russia, India have already firmed up their footholds.
Meanwhile, exporters have demanded lobbying on Bangladesh government's part with its next-door neighbour's counterpart for removing the non-tariff barriers that stand in the way of steel product exports to the northeast states of India, which they consider a good market.
Such barriers include mandatory standard certification from the Bureau of Indian Standards (BIS) and the levy payable to the BIS on production.
The steel exporters have also sought simplification of the process of returning the duty at the time of export, which they pay on the imports of raw materials. They complained that they face hassles in recollecting such duty from the government.
“We have to visit about 12 different offices for every particular consignment of export to get our duty back against export, which is really cumbersome,” said Hefazatur Rahman of PHP Steels.
If the government allows steel product makers to pay taxes after bringing those under bonded warehouse, the sector will really be benefited to enhance the export volume.
Abul Khair Steel, PHP Steels Ltd, Apollo Ishpat, S Alam Steel Mills are currently exporting CI and GP sheets to Africa.