Bashundhara’s Steel Plant (BSMIL) Set To Start Production By Mid-20263 min read

Bashundhara Multi Steel Industries (BMSIL) is poised to revolutionize Bangladesh’s steel production sector with its ambitious plan to establish the world’s largest single-strand mini mill project for long steel products. Set to operate at the National Special Economic Zone in Mirsarai, Chattogram, BMSIL aims to commence production by mid-2026, according to project officials.

This cutting-edge facility, which will use modern and environmentally friendly technology, will enable BMSIL to become the first company in Bangladesh to produce rebar coil and wire rods. Through the adoption of world-renowned Italian technology from Danieli’s MIDA®-Q, an energy-efficient and environmentally friendly endless casting and rolling process, the project promises to cut the production cost per tonne of steel by approximately Tk3,000 compared to conventional methods. This reduction in production cost, along with consistent product quality, will ultimately benefit buyers and the steel industry as a whole.

With an annual production capacity of 1.25 million tonnes, the BMSIL project will contribute significantly to the local economy. Over half of the development work at the 70-acre site has already been completed, and the project is expected to directly employ over 3,000 workers once fully operational. In addition to this, the production of wire rods will serve as an import substitute, helping the country save approximately $250 million (equivalent to Tk3,000 crore) in foreign currency.

The project’s initial cost was estimated at Tk3,700 crore, but due to local currency devaluation, this is now expected to rise to Tk4,700 crore. BMSIL is also planning the construction of a jetty on the Sandwip Channel to facilitate the transportation of raw materials, although this initiative has yet to begin. The factory’s infrastructure construction is still ongoing.

Bashundhara’s new investment comes after a previous attempt in the early 2000s to set up a steel manufacturing venture in Manikganj, which was unsuccessful due to location-related issues. More than 20 years later, the company is making a major reinvestment in the steel sector, fueled by the growing demand for steel driven by Bangladesh’s development.

Read more: Inauguration Of BSRM’s Environment-friendly Steel Plant Funded By JICA

Mohammad Mazedul Islam, Head of the Project at BMSIL, explained that although per capita steel consumption in Bangladesh is currently low at approximately 55 kg—compared to India’s 93.4 kg, Japan’s 432.5 kg, and the USA’s 266.3 kg—the country’s growing economy and infrastructure development are expected to drive a continuous rise in demand. Steel consumption in Bangladesh is projected to rise to 95 kg per capita by 2030. Between 2018 and 2023, the country’s steel production grew by around 64%, reaching 9 million tonnes, though it still falls short of demand by 800,000 tonnes.

Despite the promising outlook, BMSIL faces significant challenges in securing financing and managing shipment delays. Banks have not provided the financing as initially committed, leading to consignments worth Tk200 crore being stuck at the port, incurring daily demurrage charges that have accumulated to over Tk100 crore. The financing delays are exacerbated by the local currency devaluation, with an additional Tk1,000 crore expected to be required for the project’s completion.

The company had initially secured a syndicated loan of Tk2,305 crore from eight banks, but only Tk540 crore has been disbursed so far. These delays have created financial strain, and BMSIL has requested an increase in the syndicated term loan by Tk447 crore to meet the rising costs. Furthermore, there are concerns regarding the timely supply of essential utilities like gas, water, and power, with approvals for 3 mmscfd of natural gas, 6MLD of raw water, and 200 MW of power granted. However, the full supply of these utilities remains uncertain, adding further complexity to the project timeline.

Despite the financial and logistical challenges, BMSIL remains optimistic about its future. The project’s transformative impact on Bangladesh’s steel industry, coupled with its focus on energy efficiency, environmental friendliness, and import substitution, positions it as a key player in the country’s industrial growth. The success of this venture will not only meet the domestic demand for steel but also contribute significantly to the country’s foreign exchange savings, marking a milestone in the development of Bangladesh’s manufacturing sector.

For more updates, be with Markedium.