Steel market providing a solid foundation for national growth | The Daily Star
12:00 AM, November 13, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Steel market providing a solid foundation for national growth

Steel market providing a solid foundation for national growth

Bangladesh is on a steady road to progress. Now, it may not appear so at a first glance. For instance, Per Capita income of Bangladesh for the fiscal year of 2013-14 was $1190. If we compare this with the other developing and developed countries, it is much lower.  However, closer inspection reveals that Bangladesh is actually improving economically. When we evaluate our gradual economic improvement of the last 10 years, Per Capita income has increased significantly. The growth rate has been a healthy 14% a year. Bangladesh has also been included among the Next Eleven or N-11 of Goldman Sachs and D-8 economies.
Let's take a look at the annual development program (ADP) budget of Bangladesh given by the Planning Ministry. For the fiscal year 2014–15, the government has allocated Tk.86,000 crore BDT for the Annual Development Program (ADP). This is the largest allocation in Bangladesh's history.
Figure -1 shows the budget size for the fiscal year of 2014-15 compared to previous years:
Figure -1

If we make the necessary calculations, we can see that the average growth rate of the budget is above 22.46%. This is lower than the inflation rate. This gives the clear indication that development work in the country is increasing.
The ADP is basically involved with infrastructural development where more than 90% of the budget is being spent for civil construction. Huge amounts of construction materials are needed for those activities.  Among the basic construction materials i.e. cement, sand, stone, bricks and steel, of these the requirement and cost of steel is the highest. Thus, the volume of steel consumed has been the barometer for measuring development of infrastructure and economic progress. Whether it is construction or industrial goods, steel is the basic raw material.

Colonel Md. Ashfakul Islam (Rtd.)
Colonel Md. Ashfakul Islam (Rtd.)

The movement towards a progressive national economy thus, partially but strongly depends on how we make steel and produce deformed bar and other by-products.

A look at the national steel industry
The art of steel making and shaping has long been a part of Bangladesh's proud history. The industry has emerged as a major contributor to the national economy meeting total local requirements; manufacturers are saving billions of dollars in foreign exchange. Not only that, the industry has been a great provider of employments. The sector has created direct jobs for about 10 lakh people. According to local steel manufacturers, Bangladesh consumes 4 million tons of steel per year and per capita steel consumption is 25 kilograms, which is less than half of per capita steel consumption in India (shown in fig-2).
Figure - 2

More than 400 steel mills of different categories and sizes currently operate in the country. Together, their combined production capacity stands at 8 million tons. The industry as a whole has a net worth of about BDT 300 billion. But half of today's steel grades were not available ten years ago. For example, the most commonly used steel – rods or bars, used as reinforcement material with cement concrete. It used to be plain bars even in the sixties. They were followed by ribbed bars, and the ribbed bars were succeeded by the cold twisted deformed bars and now it is 'Thermo Mechanically Treated (TMT)' bars. Each development has added to the strength of construction. However, concerning the quality assurance aspect, all materials must conform to the ACI & BSTI standard. People of Bangladesh should be more conscious regarding quality assurance. Engineers, contractors, workers and general people are apathetic in this particular issue. To the utter surprise, people of Bangladesh  even do not even go for testing of materials; rather they just listen from someone and go for using the untested materials.

Bracing Against Disasters
Bangladesh has not yet faced catastrophes like Japan, New Zealand, Haiti, Indonesia or Philippines have, where they suffered severe earthquakes and tsunamis causing not only losses of billions of dollars but also millions of lives. They have learnt their lesson from the consecutive disasters. It is interesting to know that, owing to the latest Japanese construction standard, material quality assurance and their extensive experience, not a single building was damaged due to the     severe earthquake in Japan, 2011 (Richter scale reading was 9.0). According to the author who was in the Tokyo University, Japan at that time, only a few chunk of concrete had fallen down from civil engineering building of Tokyo University.
Now, Bangladesh is also capable of producing world standard cement and reinforcing steel (deformed bar). If people have in-depth knowledge and cautiousness regarding the use of quality product, then quality products would be available in the market and at the same time industry would also be forced to continue to do improvement of their product. Concerning steel, it can be said that, steel, which are produced from ingot or scrap must not be used. For major frame-structures, steel, produced from virgin billet, must be used and all the quality check tests are required to be carried out before use. One must not be misguided by the jargon advertisement. Consulting qualified experienced engineers can save the contractors and other entrepreneurs in many fields.
Riding on government programs centering vision for 2021, the local manufacturers believe that steel industry should continue to grow above 12% in the next few years. The ongoing major projects like 'Padma Bridge', 'Dhaka-Chittagong Access Control Highway' and the upcoming major projects like 'Dhaka Elevated Expressway' and the 'Deep Sea Port' would be requiring huge quantity of quality construction materials. Successful implementation of these projects holds a very good potential for top line growth, as steel and steel rods in particular feature prominently as raw materials of these projects.
Thus we can hope that the demand of MS rod will continue to grow at an increasing rate. We hope steel industry in Bangladesh will grow with quality products for the next generation.     
 

The writer is Head of Corporate –Dhaka -KSRM Steel Plant Ltd. E-mail: ashfak@ksrm.com.bd

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