A consortium of 17 local companies and a Chinese steelmaker is set to invest $3.5 billion to establish a Bangladesh-China joint venture integrated steel plant in Moheshkhali.
Of the sum, Kunming Iron and Steel Holding Company (KISC), a leading steelmaker from China, will foot $2.4 billion.
The rest will be provided by Star Infrastructure Development Consortium (SIDC), a combination of 17 business groups including BRSM, Crown Cement, Nitol Niloy and Unique Group.
“We have a plan to build a plant that would provide all kinds of steel products,” said Abdul Matlub Ahmad, chairman of Nitol Niloy Group.
More than 20 lakh tonnes of steel products would be manufactured at the plant, according to the business proposal submitted to the Bangladesh Economic Zone Authority.
“This plant will be an import substitute, and it would save foreign exchange,” said Ashraful Haq Chowdhury, managing director of SIDC, adding that the plant will create employment for 20,000 directly.
The construction of the plant would not start for another year, he added.
Manwar Hossain, managing director of Anwar Group of Industries that owns Anwar Ispat, said foreign direct investment is always welcome.
“But we have to keep in mind that the foreign investments do not hurt the local players, especially small ones,” he added.
Meanwhile, two preliminary agreements were signed in November last year between BEZA, KISC and SIDC.
Ahmed said this would be a mega project comprising a port, a coal-fired power plant and a cement factory and the members of the consortium would invest in the plant as partners.
The project needs depth of the sea as they would anchor the mother vessel iron ore that would be used as raw material for the steel plant, said Paban Chowdhury, executive chairman of BEZA.
Subsequently, the China-Bangladesh joint venture sought 1,000 acres from the Bangladesh Economic Zone Authority in the Moheshkahli economic zone.
KISC is conducting feasibility study in two sites, Chowdhury said.
It wants to establish a cement factory to use the fly ash of the steel plant and a power plant to utilise the heat of the steel plant.