BSRM Steel to invest Tk 100cr in own billet making entity

A worker is busy at a factory of BSRM Group in Chittagong. BSRM Steel plans to invest Tk 100 crore in BSRM Steel Mills.Photo: Star File Photo

BSRM Steel Ltd plans to invest Tk 100 crore in BSRM Group's billet manufacturing arm to be able to source raw materials locally and reduce dependency on imports.
“We have decided to subscribe for a 25 percent stake, or 10 crore shares, in BSRM Steel Mills Ltd using our own source fund,” said Aameir Alihussain, managing director of BSRM Steel, a listed firm.
BSRM Steel and BSRM Steel Mills are separate entities of the Chittagong-based steel conglomerate BSRM Group.
“BSRM Steel Mills will supply all the billets it will produce to BSRM Steel, as a result of the share purchase,” said Alihussain.
At present, BSRM Steel's annual consumption of billet is five lakh tonnes, majority of which are imported from Japan, Taiwan, Korea, Turkey, India, North America and South America.
Billet, also formally known as bar stock, is a common form of raw purified metal, used to manufacture metal parts and products.
But the prices of billet fluctuate violently in the international market, increasing the cost of rod production locally, said Alihussain.
“Availability of billet from a local manufacturing company will reduce the per tonne cost of rod production by Tk 2,000 to Tk 5,000,” he said, while adding that it will also increase BSRM Steel's profitability in the days ahead.
With the expansion of business, BSRM Steel will annually need around 10 lakh tonnes of billet casting in future, said Alihussain.
The company, in a posting on the Dhaka Stock Exchange website, said BSRM Steel Mills is setting up a new billet making plant at Mirsarai in Chittagong with an approximate cost of Tk 1,300 crore.
The production capacity of the plant will be 8.6 lakh tonnes of billet per annum, sufficient to feed the entire raw materials or billet requirements for BSRM Steels and its parent group's other concerns.
Commercial production of the new billet plant is expected to commence by mid-2014, said the web posting.
The news, however, did not have a positive impact on BSRM Steel's share prices.
Founded in 1952, the BSRM Group is now the leader in the local steel market.
BSRM Steels started operation in June 2008, and now has an annual production capacity of around six lakh tonnes of steel rods; it was listed on the stockmarket in 2009.

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