Bashundhara’s Steel Revolution: Transforming Bangladesh’s Industrial Landscape
Bashundhara Multi Steel Industries Limited (BMSIL) is embarking on an ambitious project to establish the world’s largest single-strand mini mill for long steel products, located at the National Special Economic Zone in Mirsarai, Chattogram. This massive industrial venture is set to transform Bangladesh’s steel sector by introducing new technology, improving production efficiency, and meeting the ever-increasing demand for steel products.
The project, which is expected to commence operations by mid-2026, will use cutting-edge Italian technology from Danieli’s MIDA®-Q, a renowned system known for its energy efficiency and environmentally friendly processes. With a production capacity of 1.25 million metric tons annually, the plant will focus on the production of rebar coils and wire rods—products that are crucial for the construction and manufacturing sectors. This will be the first time that these products are produced locally at such scale, helping reduce Bangladesh's reliance on imports.
Why This Steel Plant Is a Game-Changer
Bashundhara’s new steel plant aims to solve multiple critical issues facing the steel industry in Bangladesh:
1. Addressing the Steel Deficit:
Currently, Bangladesh’s steel production meets only part of the demand. According to industry reports, steel production grew by approximately 64% from 2018 to 2023, reaching around 9 million metric tons. Despite this, the country still faces an 800,000 metric ton shortfall in meeting domestic demand. BMSIL's plant will help fill this gap and make the country more self-sufficient.
2. Reducing Import Dependency:
The production of wire rods in particular is expected to serve as an import substitute. Currently, Bangladesh imports significant quantities of steel products, leading to a foreign currency outflow of approximately $250 million annually. BMSIL’s plant will help retain these funds within the country, bolstering Bangladesh’s economy.
3. Lower Production Costs:
The advanced technology used in the production process will enable BMSIL to reduce the cost per metric ton of steel. Compared to conventional methods, the cost of producing rods will be reduced by approximately Tk3,000 per metric ton, making steel more affordable for local consumers and businesses.
Challenges Facing the Steel Plant
Despite the promising potential of the project, BMSIL is grappling with several challenges that threaten to delay its launch:
1. Financing Hurdles:
One of the primary obstacles is securing adequate financing. Banks have not been able to provide the expected loans, with only Tk540 crore of the initial Tk2,305 crore syndicated loan being disbursed so far. Due to devaluation of the local currency, the overall cost of the project is now expected to increase to approximately Tk4,700 crore. This gap is putting considerable financial pressure on the company, which is now requesting an additional Tk447 crore in loans.
2. Logistical Delays:
Consignments worth Tk200 crore are currently stuck at the port due to delays in the release of shipping documents by banks. This delay is incurring significant demurrage charges, which have already reached over Tk100 crore. The company has also faced difficulties in securing necessary utilities such as gas and water from the Bangladesh Economic Zones Authority (BEZA), despite prior agreements.
3. Uncertainty Over Utility Supplies:
Although BMSIL has secured permission for a gas supply of 3 million standard cubic feet per day (mmscfd), a raw water supply of 6 million liters per day (MLD), and 200 MW of power, concerns remain about whether these utilities will be fully available on time. Delays in utility provisioning could impact the overall timeline and efficiency of the plant once it begins operations.
A Vision for the Future: Bangladesh’s Growing Steel Demand
Bangladesh’s steel consumption per capita is still significantly lower than that of neighboring countries like India, Japan, and the USA. Currently, the per capita steel consumption in Bangladesh stands at approximately 55 kg, compared to 93.4 kg in India and 432.5 kg in Japan. However, as the economy continues to grow, steel demand is expected to rise dramatically.
By 2030, Bangladesh's per capita steel consumption is projected to increase to 95 kg. This surge in demand is primarily driven by the rapid growth of the construction sector and the country’s ongoing industrialization efforts. The BMSIL steel plant is positioned to play a key role in meeting this growing demand and supporting Bangladesh’s development ambitions.
The Impact on Employment and the Economy
Once fully operational, the Bashundhara steel plant is expected to create direct employment opportunities for over 3,000 workers. Additionally, the plant’s operations will stimulate related industries, including transportation, raw material supply, and construction, further contributing to economic growth.
The project will also have a significant impact on the local economy by reducing steel imports, saving foreign exchange, and promoting self-sufficiency in steel production. With the steel industry playing a vital role in the construction, infrastructure, and manufacturing sectors, BMSIL’s plant is poised to become a cornerstone of Bangladesh's industrial future.
Key Takeaways:
• World’s Largest Mini Mill: Bashundhara Multi Steel Industries (BMSIL) is building the world’s largest single-strand mini mill for long steel products in Chattogram, with an annual production capacity of 1.25 million metric tons.
• Reduced Import Dependency: The plant will help Bangladesh reduce its reliance on steel imports, saving approximately $250 million annually in foreign exchange.
• Cost Efficiency: The advanced technology will reduce production costs by approximately Tk3,000 per metric ton, making steel more affordable for the local market.
• Steel Deficit: Despite recent growth, Bangladesh’s steel production still falls short of demand by 800,000 metric tons, which BMSIL aims to address.
• Financial Challenges: The project is facing financing issues, with banks disbursing only a portion of the sanctioned loan and an increase in project costs due to currency devaluation.
• Logistical Issues: Consignment delays at the port have led to significant demurrage charges, further adding to the project’s financial strain.
• Utility Concerns: While permissions for utilities like gas, water, and electricity have been secured, there are concerns about whether these supplies will be available on time.
• Economic Impact: The plant is expected to create over 3,000 direct jobs and stimulate related industries, contributing to the growth of Bangladesh’s economy and industrial sector.
• Growing Demand for Steel: As the country’s economy expands, per capita steel consumption is expected to increase from 55 kg to 95 kg by 2030, driving demand for locally produced steel.
