How steel from Chattogram helped build the nation's infrastructure

About a decade ago, the per capita consumption of steel in Bangladesh was 25kg. Today, it is estimated to have reached about 43kg, indicating massive progress in infrastructure development across the country. 

Bangladesh's steel industry started its journey in Chattogram seven decades ago with BSRM, and is currently self-sufficient. Local manufacturers are now exporting steel products abroad.

At present, investment in this sector stands at about Tk50,000 crore, say industry insiders. Local steel mills' total production has increased almost fourfold compared to that around 12 years ago.

A big chunk of the demand for steel comes mostly from infrastructure projects, like the Padma Bridge, Metrorail, Bangabandhu Tunnel, road networks, as well as bridges and rural infrastructures across the country. 

According to the Bangladesh Steel Manufacturers Association, before 2010, the country produced about 16 lakh tonnes of steel, which has recently increased to about 60 lakh tonnes. There are about 250 small and big steel factories employing 5 lakh people across the country.

The country's economic progress has resulted in an infrastructure development process that heralds an increased demand for steel in the coming days. And the steel industry is ready to meet the country's increasing demand for the next 10-15 years as it has an annual production capacity of 80 lakh tonnes.

Around 50-55 lakh tonnes of steel products made in local factories are used in the country, while the rest is exported abroad. Around 60% of steel products manufactured here are used in government projects, while 25% is used at the individual consumer level, and around 15% in the private sector.

Md Shamsul Alam Khan, executive director of the Bangladesh Steel Manufacturers Association, told The Business Standard, "As the economy has grown, so has the steel industry. With the increase in demand, entrepreneurs have also increased production. That is why there is no import dependency now. The sector has become self-sufficient."

Chattogram home to country's top four steel producers

In 1952, the country's first steel factory, East Bengal Steel Re-Rolling Mills, was established in the Nasirabad industrial area of Chattogram. After independence, the company changed its name to Bangladesh Steel Re-rolling Mills (BSRM). Akberali Africawala established the company, which is currently led by Company Chairman Alihussain Akberali and Managing Director Aameir Alihussain. The top company in the steel sector has eight factories with an annual production capacity of 16 lakh tonnes of rods and 19 lakh tonnes of billets.

Aside from BSRM, three other biggest steel mills in the country are also in Chattogram. Almost 50% of the country's demand for steel is met by the factories in the area, said the industry insiders.

Abul Khair Steel (AKS) of the Abul Khair Group, which joined this sector in 1993, has an annual production capacity of 14 lakh tonnes. The company initially made corrugated iron sheets and started producing rods in 2009.

Kabir Steel Re-Rolling Mills Limited (KSRM) launched in 1984. It currently has an annual production capacity of 8 lakh tonnes of steel products.

GPH Steel – launched in 2006 – has an annual production capacity of 10.50 lakh tonnes of billet and 10 lakh tonnes of rod.

Golden Ispat Limited, a subsidiary of Mostafa-Hakim Group, has an annual production capacity of 2.5 lakh tonnes. HM Steel and Industry has the capacity to make 6 lakh tonnes, while Bayezid Steel has the capacity to produce about 1 lakh tonnes of steel goods.

Developed in a favourable environment

Heavy, medium and light industries started to develop in Chattogram in the British period due to port-centric facilities in the area. The reason for the expansion of the steel industry there is also the same.

People involved in this sector said the steel industry developed in Chattogram because the area had the facilities to dismantle scrap vessels after importing them. After the 1990s, large investments began to flow into the ship-breaking industry. With the demand for raw materials in the steel industry, the shipbreaking industry also grew.

In 2011, seven mauzas of Sitakunda were designated as industrial zones, where a quarter of the world's total ship-breaking activities are carried out. About 80-90% of the iron required in Bangladesh factories comes from ship-breaking yards located in Faujdarhat and Sitakunda. Typically, around 95% of a ship is made of mild steel, the main raw material of the steel industry.

However, the steel sector and ship-breaking industry are currently in crisis due to the global economic recession, inflation, Bangladesh's foreign exchange crisis, the Russia-Ukraine war, and post-pandemic effects.

Imports have declined due to the dollar crisis and companies have to reduce production. In addition to that, there is also a crisis of gas and electricity. In such a situation, keeping in mind the future crisis, it is necessary to take action now, the sector insiders said.

Aameir Alihussain, senior vice president of the Bangladesh Steel Manufacturers Association, told TBS, "The country's current economic growth suggests that the demand for steel here will increase. Steel will be needed for infrastructure development."

"So, the sector needs to be prioritised and favourable policies should be formulated. The import of raw materials should be facilitated. Otherwise, the cost of production will go up."

 Chattogram's mills supplied all the rod for Padma Bridge

The main task of the Padma bridge project was to build a bridge spanning 6.15 kilometres, the world's 122nd longest bridge. Dividing the total stretch into 40 parts, the structure of the bridge was made by installing 42 spans on 43 piers.

Installing steel structure spans has cost the most. All of the 42 spans were made in China's Hubei province and then shipped to the project site.

For the construction of the total of 118 piers, including 43 on the river and 76 on the shore, steel rods, cement, concrete and sand was sourced from local companies. The project, including the connecting roads, used a total of 1 lakh tonnes of steel rod. 

BSRM was the sole supplier of 86,000 tonnes for pier making and river training while the remaining came from other local steel manufacturers. After BSRM, KSRM was the second largest steel rod supplier to the project.