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Tata Steel plant will not compete with local manufacturers

Written by: Staff

Dhaka, May 12: Assuring that the proposed investment by Tata group in steel sector would in no way hamper the interest of local manufacturers in Bangladesh, Tata group Resident Director S Manzer Hussain said the group would never produce those products which the local manufacturers have been producing.

''Tata will never produce MS rod or those products the local manufacturers have been producing,'' the Tata Resident Director said in an interview with UNB yesterday.

Saying that even though the group will produce sponge iron, which the local manufacturers also produce, he informed that the product would be used for its own consumption and not for sale in the local market.

''There is no possibility of any conflict with the local steel and re-rolling mill operators,'' said Mr Hussain.

He claimed that instead of impeding the growth of the local steel manufacturing industries, particularly those producing MS Rod, Tata would support the CR Sheet producers.

The local steel manufacturers, particularly the operators of steel and re-rolling mills, expressed their concerns over the recently submitted revised proposal of the Indian industrial conglomerate for setting up a steel plant with a production capacity of 2.4 million tonnes per annum.

They apprehended that the Tata's steel plant would be a great threat to about 100 steel and 300 re-rolling local mills, which presently produce about 2.0 million tonnes of MS rod for the country's real estate and housing sector.

They said their industries, developed by an investment of about Taka 5,000 crore, would face closure if the proposed heavyweight steel plant comes into operation.

In a recent press conference, the local producers also urged the government not to allow the Tata Group to set up its steel plant.

However, disagreeing with the country's steel manufacturers, Mr Hussain said the Tata steel plant, which is expected to be operational by 2011, would produce hot rolled coil from iron ore as primary raw materials for the local cold rolling mills and tube industries.

The shipbuilding industries could also be the potential buyers of the Tata's HR coils with a thickness between 1.6 mm and 2.2 mm.

The Tata Resident Director said, at present, there are eight to nine large CR Sheet producing plants operating in the country, including Rahim Steel, PHP, Abul Khair, Apollo, RM Steel and NGS, who mainly produce corrugated sheets. The annual requirement of hot rolled coil by these industries is about 0.8 million tonnes a year.

All the mills in the country import HR coils worth 500 million dollars per annum to produce their CR Sheets and corrugated sheets.

Tata's Indian steel plant is also a major source of these raw materials for these industries.

''Actually, Tata steel plant in Bangladesh will substitute those imported raw materials saving huge foreign currency for Bangladesh,'' he said.

He said after meeting the local demand of the HR coils, Tata would export the rest to the international market. The local steel manufacturers, particularly the steel and re-rolling mills, never use the HR coils.

They use the locally collected scraps and other imported billet of old ships, he added.

Mr Hussain said the steel plant would create about 3,500 direct employment for Bangladeshis while the indirect employment would be almost triple.

He said Tata would establish a training institute and a 100-bed general hospital in its steel project area as part of its social welfare services.

''Tata will never go to produce MS rod or those products the local manufacturers have been producing,'' the Tata Resident Director said. He mentioned that Tata would produce a very small amount of sponge iron, which the local steel manufacturers also produce.


''Tata will produce sponge iron for its own consumption, not to sell in the local market,'' he said, adding that there is no possibility of any conflict with the local steel and re-rolling mill operators.

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