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Monday, August 4, 2008
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A file photo shows workers busy at a steel mill. Local industrial conglomerates are now preparing to go for a $ 1.5 billion or Tk10,000 crore investment in the basic steel sector on the Indian Tata Group's pull-out from its proposed US$3 billion investment plan.Photo: STAR
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Local industrial conglomerates are now preparing to go for a $ 1.5 billion or Tk10,000 crore investment in the basic steel sector on the Indian Tata Group's pull-out from its proposed US$3 billion investment plan, according to sector people.

They said they do not see any big impact on the country's economy after Tata scrapped its Bangladesh project.

These conglomerates are S Alam Cold Rolled Steels, Abul Khair Steel Products, PHP Group, Jamuna Group, KY of KDS groups and Meghna Group of Industries.

A consortium of four steel companies S Alam, PHP, KDS and another Chittagong based company is conducting a feasibility study to set up the country's first ever hot-rolled steel plant in collaboration with the Essar Group from India. A memorandum of understanding to go ahead with this joint venture was signed in February with the Essar Group. As per their plan, the project is to go into production by 2010.

“We will submit the concrete proposal of our project to the Board of Investment (BoI) after completion of the feasibility study of the project by this year,” said Saiful Alam Masud, managing director (MD) of S Alam Group.

The consortium earlier planned to set up the Tk 3,500 crore steel plant in Chittagong, but now it mulls to establish it in Dhaka due to acute gas crisis in the port city.

The S Alam Group MD added, “If the government provides us the same incentives what it promised to allow Tata Group, we will successfully establish bigger steel projects than Tata's and will be able to amass the necessary fund from both local and foreign sources.”

Besides, Abul Khair Group has a plan to set up a basic steel plant in Chittagong. A senior executive of the group said, “ It has made up its mind to start work on establishing the Tk 2500 crore project in the port city as soon as possible as Tata's scrapping of its Bangladesh project brightened the market prospect of its project.”

“If we get green signal from the government about availability of gas we may start working on the project by January next year,” he added.

Meanwhile, Jamuna Group, a leading developer, has already submitted a Tk 2000 crore steel project plan to the Board of Investment (BoI) targeting producing around 1.5 million tonnes of HR coil, steel plate and slab per annum.

“We submitted our plan even when the Tata's project was in place. Now the government can consider the same benefit it offered to Tata,” an executive of Jamuna Group said.

The BoI sought opinion from different ministries and departments concerned about the investment plan.

A high official of the Jamuna Group said it will collect the fund locally and if the government approves the plan it will start working within the next couple of months.

The government has been seriously considering some of the private industrial groups' proposals to set up basic iron industry in the country to cope with the crisis of the steel industries in the long term, a high official of the BoI said.

The country is fully dependent on imports for its annual requirement of around 5 lakh tonnes of HR coil. HR coil is the raw material of CR coil which is used to make corrugated iron sheet, iron plate and other flat iron.

The major part of the requirement of over 3 million tonnes of re-rolling steels comes mainly from scrap ships and recycling industries.

jasim@thedailystar.net

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