BSRM Steel to create Tk 700cr plant
BSRM Steel has made a decision to set up a Tk 700 crore plant to raise twelve-monthly MS rod production capacity by another 5 lakh tonnes to meet up its growing market demand.
The Chattogram-based listed steelmaker is expected to start the operation of the new production unit by the center of 2023.
The investment fund would result from loans and own sources, according to the data shared by the leading steelmaker with the stock investors of Dhaka and Chattogram stock exchanges yesterday.
The paid-up capital of the listed steelmaker was Tk 375 crore while its reserve and surplus were Tk 1,044 crore towards the end of the fiscal year that ended on June 30 of 2019.
Alternatively, the company's short-term loan was Tk 2,275 crore and a long-term loan amounted to Tk 906.79 crore.
At the moment, BSRM Steel is generating 2 million tonnes of MS billet and 1.6 million tonnes of re-rolling steel each year.
Consumption of steel has been rising for the last couple of years riding on the increasing gross domestic product (GDP) of the united states.
Moreover, the government's development projects have gone a positive effect on the nearly Tk 50,000 crore industry, according to advertise players.
At present, government projects account for 35 % to 40 % of the full total steel consumption in Bangladesh, up from 15 % a decade ago.
The country's total annual steel production capacity was 8.58 million tonnes in 2018 when total consumption was 7 million tonnes.
Although per capita steel consumption in Bangladesh almost doubled in eight years to over 45 kilograms in 2018, the figure was still lower compared to the global average of 208 kgs, in line with the World Steel Association.
The figure stands at 65 kgs in India, 400 kgs in South Korea, and 1,000 kgs in Japan. To meet up the spiraling demand, other steelmakers are also increasing their production capacity.
GPH Ispat, another listed steel manufacturing company, had already started its new Tk 2,390 crore plant on a trial basis.
The brand new factory of GPH Ispat gets the annual capacity to create 840,000 tonnes of MS billet and 640,000 tonnes of MS rod and medium section products.
Despite the news of the new investment yesterday, the share price of BSRM Steel listed with the DSE since 2009 dropped 0.51 percent to Tk 39.20.
The steelmaker also informed yesterday that its board of directors recommended a 15 % cash dividend for the entire year that ended on June 30 of 2020.
The business's earnings per share (EPS) was Tk 1.97 for the current year, down from Tk 4.60 in the previous year.
The business blamed the fall in EPS on the reduced production and slow sales following the Covid-19 outbreak along with various tax issues.
