SS Steel to acquire fixed assets of two other steel firms

Publicly listed steel manufacturer SS Steel Limited is set to acquire the fixed assets of two other steel manufacturers—Super Steel Limited and Peninsula Steel Mills Limited—as part of business expansion. 

The fixed assets to be purchased include lands totalling 164 decimals, steel structure sheds, buildings, capital machinery, and utility connections with a total estimated value of Tk130 crore, according to SS Steel's stock exchange filing on Monday. 

SS Steel stated that this fixed asset acquisition is a part of the company's commitment to enhancing production capacity, and it will contribute 62,400 tonnes MS rod per annum.

In August 2020, SS Steel acquired the Chattogram-based Saleh Steel Industries and took over the Narayanganj-based Al-Falah Steel & Re-Rolling Mill in March 2022.

After all its acquisitions, the company expects its accumulated annual capacity to reach nearly 442,800 tonne MS rods and annual revenue to reach nearly Tk3,000 crore within the next financial year. 

Since both the Chattogram-based companies—Super Steel and Peninsula Steel Mills—are up and running, SS Steel eyes the revenue to hit its accounts from the next quarter. 

SS Steel will finance the new acquisition from its retained earnings and loans from banks and financial institutions, the company informed through the disclosure. 

SS Steel's Chairman Javed Opgenhaffen said, "As part of our sustainable business plan, we are focusing on increasing our production capacity. In this regard, we have found that Super Steel and Peninsula Steel will be the right choice for us as it has a ready factory setup and great potential. So, our board of directors has decided to take over their fixed assets."

"Hopefully, this initiative will enhance our competitive edge as we can quickly operationalise the plant and create value for the company and customers," he added.

SS Steel Limited, which started its journey in 2001, produces MS billets and MS rods from raw material scraps to finished goods. Over the years, the company's products have been chosen solely for building major national landmarks and infrastructures.

At the end of the fiscal 2022-23, the company's bank borrowings and other liabilities stood at Tk974 crore, which was Tk60.83 crore five years ago. 

Recently, the Bangladesh Securities and Exchange Commission has expressed concerns regarding the escalating liabilities of the company.

At the end of Thursday's trading session, SS Steel shares closed at Tk16.6 each at the Dhaka Stock Exchange.