Steel structure makers boom with mega projects

Makers of steel structures, known as pre-engineered buildings (PEB), are expecting good business riding on some big government projects. 

The projects, worth around Tk50,000 crore, include metro-rail stations, Dhaka Hazrat Shahjalal International Airport's third terminal, expansion of Osmani International Airport, Sylhet and Shah Amanat International Airport at Chittagong.

Around 30 percent of the total cost of these projects will be on steel structures, according to officials and sector players. 

"We expect the PEB industry to grow by 40-45 percent in the next two to three years, thanks to some upcoming mega-projects of the government," said Alomay Biswas, chief engineer of Steelpac Ltd, one of the leading companies in this sector.

Businesses use PEB for their manufacturing plants to save time and cost because these structures cost less than half of concrete structures. PEB makers supply all components to the plant site, and then assemble them with nuts, bolts and anchor bolts.

According to industry insiders, around 100 companies are now providing PEB solutions in Bangladesh. At least 20 companies have entered the market in the last five years.

Some of the big firms are Magnum Engineering and Construction, Bangladesh Building System, Steelpack, a concern of Energypac Engineering, McDonald Steel Building Products, Quantum Builders and Engineering, Build Trade Engineering Ltd, PEB Steel Alliance, ALM Steel Building Technology, Tiger Steel Bangladesh and Newaz Steel Ltd.

Market almost doubles in 5 years

The PEB industry in Bangladesh has grown considerably in the last decade riding on rapid economic growth and industrialisation. The manufacturing sector's contribution rose to 35 percent of the country's GDP in the last fiscal year, up from around 25 percent a decade ago.

The steel structure business also saw rapid growth with it. The market almost doubled in the last five years, according to the Steel Building Manufacturers Association of Bangladesh.  

The size of the market was around Tk2,500 crore in the 2017-18 fiscal year.

Now local companies hold around 85-90 percent of market share, and foreign firms make up the rest.

"The PEB sector has huge potential, but growth was slow last year due to a decline in private sector investment," Mohammad Mohsin, company secretary of Bangladesh Building Systems Ltd, told The Business Standard. 

"Local companies have the capacity to develop large infrastructure, but they are facing unequal competition when participating in public procurement because the government usually provides duty-free import facilities to foreign firms working on megaprojects," he explained.

Mohsin said once there was hardly any local company in this sector, but now homegrown firms rule the roost.    

Industry insiders said PEB technology has ample scope for expansion because Bangladesh still has a lot of catching up to do with other Asian nations in the use of steel.

They said they saw better days ahead for the industry because of the country's economic growth.

Humayun Rashid, managing director of Steelpac Ltd, said the culture to opt for PEB has not fully developed in Bangladesh.

He said a good number of commercial buildings in the country have been built with this technology but residential buildings are still built the conventional way. 

Why PEB technology

Industry people and experts said PEB technology is globally known as being environment-friendly and sustainable considering its energy efficiency. 

It is moveable, earthquake-resilient, and saves time and money.  

It also offers engineers and architects a way to create large, column-free interiors.

PEB structures have more than 100-years lifespan in Bangladesh, while reinforced cement concrete (RCC) construction may last for 35-40 years, said Professor Ahsanul Kabir, head of the civil engineering department at the Bangladesh University of Engineering and Technology.

The Hardinge Bridge and other railway bridges are the best PEB examples in the country, he said. 

"The average lifetime of RCC structures is 90-100 years globally," the professor said. 

A typical five-storey RCC building takes two years to complete, whereas the same building can be built in six to seven months using PEB technology, according to industry experts.

In this method of construction, most of the work is finished on the builder's premises and only the assembling is done on site. 

This construction technology also offers a significant advantage in terms of cost – steel buildings cost only Tk250-300 per square foot while RCC structures cost Tk500 per square foot, say industry insiders. 

Challenges and benefits

The use of PEB technology comes with several major challenges, according to industry sources. Fire incidents, meltdown and collapse of steel structures in case of fire, lack of raw material and high duty on imported raw materials are some of the issues they have to struggle with in the business.

However, they said steel buildings offer strength and affordability that one cannot get from traditional building construction methods.

The association leaders demanded policy formulation for local companies to get a level playing field for participating in government tenders, and setting duty structure for importing raw material.