CI sheet price
Entrepreneurs take industrial ventures when on analysis it appears profitable. The same factors influenced a few industrialists in Bangladesh in the late 90s and early 2000s. They analysed the then fiscal policy of the government and found that it would be profitable to set up and operate Cold Rolling Mills (CRM) to produce Cold Rolled (CR) Coils. The galvanizing factories in Bangladesh then imported CR Coils from abroad to produce Corrugated Iron (CI) sheets and Galvanized Plain (GP) sheets. The duty structure on import of Hot Rolled (HR) Coils, basic raw material to produce CR Coils was low. Only 5% customs duty, 4% DSC, 3% AIT and 1% PSC were imposed on HR Coil import. Encouraged by these fiscal policy, a few reputed industrialists over here established some sophisticated large industrial projects, viz. Cold Rolling Mills (CRM) from 1997 to 2003. Total achievable production of these CRMs stood at 7.5 hundred thousand metric tons. In 2003 the total demand of CR Coils was estimated at 6 hundred thousand metric tons. Before setting up of CRMs in Bangladesh, all the CR Coils were imported from abroad. When the country achieved self-sufficiency in producing CR Coils, the government started to increase customs duty from 5% to 7.5% then 10% there after 15% on import of HR Coils. In addition to that the government imposed 15% VAT on import of HR Coils. On the other hand, the basic prices of HR Coils have increased many folds in international market within a couple of years. All these factors increased the cost of production of CR Coils. As a result, the cost of production of end product, Corrugated Iron (CI) sheets and Galvanized Plain (GP) sheets crossed the purchasing power of the most consumers. It is estimated that annual demand of CI sheets and GP sheets has gone down to 3 hundred thousand metric tons owing to abnormally high prices. To bring down the price to a significant level, the duty structure on import of HR Coils needs to be re-fixed at 5% and VAT needs to be withdrawn as those were before 5-6 years.
We do not have control over international price of HR Coils, but our government can review its fiscal policy to bring down the CI and GP sheets prices, so that consumers in Bangladesh can purchase CI sheets and construct low cost houses.