GPH exports $ 71 million billets to China
Steel contractors want barriers to end to capture multi-million dollar global market
GPH Ispat has exported 120,000 metric tonnes of billets worth $ 71 million to China, the world’s largest steel producer, through five shipments since November 18 last year.
The billet is the main raw material for the production of rods. The rod is made by heating and molding. China is currently the world leader in the production of billets. They alone control about half of the total market.
Minister of Industry Nurul Majid Mahmud Humayun, Minister of Commerce Tipu Munshi, Chairman of Tariff Commission, Chairman of Chittagong Port Authority, Chairman of Chittagong Chamber and other dignitaries inaugurated the export program during a webinar that day.
On October 5, GPH exported a total of 29,658 metric tons of billets through Chittagong Sea Port as part of the fifth shipment. The purchaser of the billet was Mac Steel International Fareast Limited of China, company officials said.
They also said the ship, the MV Crown Virtue, left Chittagong Port that day loaded with GPH tickets for Zhang Jiangang, China’s Yangtze River port.
However, steel entrepreneurs have said that Bangladesh is lagging behind in capturing the global million dollar steel market due to various hurdles.
They said they currently have to pay between $ 60 and $ 70 a tonne to ship banknotes from Bangladesh to China, where Vietnam only pays $ 20 to $ 25 and India pays $ 35 to $ 40.
Besides the shipping cost, the production cost is also much higher in Bangladesh than in neighboring countries, they added.
The entrepreneurs also said that these barriers must be removed in order to increase steel exports to the world market, at least five benefits must be guaranteed.
The five benefits include special incentives for the contractors involved, a reduction in the price of electricity, an uninterrupted supply of gas, a bank guarantee facility and the priority of unloading raw materials from the port in order to reduce additional transport costs. waiting day after day.
“There are many obstacles to the export of billets. Even with this, we want to spread this product to the world market. However, in order to survive on our steel in the global market, the government has to give special incentives, ”said Almas Shimul, director and additional general manager of GPH Ispat.
He also said that besides being self-sufficient in steel, the sector can also create jobs for thousands of people in the country.
Kamrul Islam, executive director of GPH, said they had to export per tonne of billets at a rent three times that of Vietnam and twice that of India.
“In addition, we have to pay 4,000 to 5,000 Tk for various kinds of duties and taxes when unloading raw materials,” he added.
He also said they had invested around Tk 500 crore in power and gas generation and were consuming 80-100 MW of electricity per hour from their own substation.
“But we don’t get a single point more than a factory that uses only 100 kilowatts of electricity per hour. As a large factory, it would have been better if the price of our electricity was a little lower, ”he added.
According to steel contractors, Bangladesh now competes with China, India, Japan, the United States, Russia, South Korea, Germany, Turkey, Brazil, Taiwan, Vietnam and Ukraine to conquer the multi-million dollar market for billets.
According to the GPH, they took the country one step further towards the industrial revolution by creating a state-of-the-art steel plant such as the Quantum Electric Arc Furnace (EAF).
Thanks to this technology, it is now possible to produce grade 900 steel products in the country.
At present, GPH grade 500-550 steel is used at the third terminal of Shahjalal International Airport, Matarbari Power Project, Deep Sea Port, etc.
GPH is a capital intensive industry, the added value of the industry is locally over 50%.
They use 50% to 70% of imported raw materials and the remaining 30% to 50% of the main raw material is collected through local sources.
According to the Bangladesh Steel Manufacturers Association (BSMA), 60% of the demand for billets was supposed to be imported just six years ago, but the country is now exporting them.
There are 210 factories producing MS products in Bangladesh and among them, 42 companies produce billets from rods and MS rods from billets. About 63 companies produce 40 grade rods.
According to the EBL report, Abul Khair, BSRM, GPH and KSRM produce more than 90% of the ticketing capacity, which is 50% more than the annual demand of the country.