Chinese company to invest $2.3b in steel plant

[Black_cats]

Chinese company to invest $2.3b in steel plant
Its chairman jets in tomorrow for talks
Mir Mostafizur Rahaman | Published: July 15, 2018 09:59:26

http://thefinancialexpress.com.bd/trade/chinese-company-to-invest-23b-in-steel-plant-1531627166

Picture used for illustrative purpose only — Collected

Chinese steel giant Kunming Iron and Steel Holding Company (KISC) is all set to invest US$ 2.3 billion in a steel manufacturing project in Mirersarai.

A delegation of the KISC led by its chairman Zhao Yongping is scheduled to arrive in Dhaka tomorrow (Monday).

The delegation will hold final negotiations with senior officials of the government and Bangladesh Economic Zones Authority (BEZA), people familiar with the development told the FE on Saturday.


This will be the largest investment in manufacturing sector in the country.

KISC will make the investment through its subsidiary company Chinese Yunnan Yongle Overseas Investment Co Limited.

The company aims to produce 2.0-million-tonnes integrated iron and steel production annually.

A consortium of 17 private players named Star Infrastructure Development Consortium Limited is acting as the local partner of Kunming.

Seventeen reputed companies including Nitol group, Unique Group and BSRM, have joined hands to form the consortium.

Kunming completed its feasibility study for site selection last month.

They were given two options-Mirersarai or Maheshkhali to establish the plant.

As water supply to the plant will be tough on the Maheshkhali Island, they are likely to opt for Mirersarai site that is situated near Bamunsundar canal, the people said.

When contacted, BEZA executive chairman Paban Chowdhury said the investment from the Kunming Group is almost certain.

"This will be a game changer for us. In the context of the US tariff restrictions on Chinese steel, we are expecting more Chinese investment in the country," he said.

About the key issues to be negotiated with the Kunming, he said, they may seek consistent policy support and assurances of utility supply, which the authorities are ready to provide.

"We will offer competitive incentive package, one stop service, promote and protect investment in economic zone for them as per our policy," he added.

Last November, two Memorandums of understandings (MoUs) were signed between the BEZA, Chinese Yunnan Yongle Overseas Investment Co Limited and Bangladeshi Star Infrastructure Development Consortium Limited to steer ahead the project.

A coal-fired 167 mw power plant, transfer platform in deep sea and private jetty, device and machine manufacture, logistics and distributions, cement and building materials and steel structure fabrication will be developed under the project.

About the project, Abdul Matlub Ahmed, Chairman of Star Infrastructure Development Ltd, said, "It's one of the largest FDI projects in Bangladesh."

"I hope this investment will help to create new job opportunities, decrease import of steel in Bangladesh," said Mr Ahmad, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

BEZA will give 1,000 acres of land for the project at a rate of Tk 4.8 million per acre. The project will create jobs for 30,000 people, an official said.

mirmostafiz@yahoo.com

 

[Samlee]

Congrats

 

[Bilal9]

Most people not involved in the industrial sector in Bangladesh realize how big of a deal this is going to be - but I consider this to be huge and not just for the steel sector but in terms of growing industrial capability.

It is way beyond the current norm of scale of production for cold rolled sheet, mainly used for roofing usage nowadays, but eventually to be used for automotive stamped sheet feedstock.

Currently Karnafully and PHP are larger producers (the latter with 120,000 TPA), There are smaller specialty producers as well. But this one from KunMing Group is 2,000,000 TPA and that is just the first unit....

Karnafully Steel Mills

PHP Steel Mills

 

[bluesky]

The company aims to produce 2.0-million-tonnes integrated iron and steel products annually.

Most important point is it will be an integrated steel mill. It means it will produce steel ingots in the smelting shops as well as various types and grades of steel in the plant. Types may be angles, channels, round bars, deformed bars, plain sheets, corrugated sheets, tubes/pipes, hot rolled coils and many others. International steel price is down this year. But, even at $450 per metric ton in average the value of 2 million ton productions will be around $900 million.

 

[Black_cats]

Most important point is it will be an integrated steel mill. It means it will produce steel ingots in the smelting shops as well as various types and grades of steel in the plant. Types may be angles, channels, round bars, deformed bars, plain sheets, corrugated sheets, tubes/pipes, hot rolled coils and many others. International steel price is down this year. But, even at $450 per metric ton in average the value of 2 million ton productions will be around $900 million.

The plant will create 30,000 job opportunities. That is the most important part from Bangladesh's perspective.

 

[bluesky]

The plant will create 30,000 job opportunities. That is the most important part from Bangladesh's perspective.

Everyone has his way of seeing things. But, who denies the prospect of creating 30,000 jobs, anyway? Today, BD imports many of the steel items that I have listed. So, an integrated steel mill will certainly be able to supply those goods to the BD market. As far as I understand there is a glut of steel products in the international markets including that of China after its Olympic events. So, it is possible that much of the products will be consumed within BD. This will stabilize the local steel supply and prices.

 

[UKBengali]

Brilliant news for BD and China!

Chinese are certainly not doing this for charity. It is to feed the fast growing BD economy and they will be richly rewarded for their multi-billion dollar investment here in the years to come.

@wanglaokan

 

[帅的一匹]

Brilliant news for BD and China!

Chinese are certainly not doing this for charity. It is to feed the fast growing BD economy and they will be richly rewarded for their multi-billion dollar investment here in the years to come.

@wanglaokan

im a deep believer BD is the next place that economy miracle is gonna happen. and the investment of China is well protected in BD, so why not more investmeht? i say invest more.

to create more job opportunity for BD people, and it will help improving their living standard.

its always a nice good experience to.invest in a stable and friendly country like BD.

i personally feel connected with BD people, and i.hope the relationship between China and BD will be further enhanced l.

 

[UKBengali]

im a deep believer BD is the next place that economy miracle is gonna happen. and the investment of China is well protected in BD, so why not more investmeht? i say invest more.

to create more job opportunity for BD people, and it will help improving their living standard.

Everyone is welcome to invest in BD.

BD finally has a stable government that will be in power for at least another 5 years. What is happening now economically cannot be undone by any future government that may come into power in the mid-2020s at the earliest. All investments are safe.

BD may be small in area but it has a huge population of 160 million and investors who get in early can hope to reap rich rewards.

 

[khansaheeb]

Brilliant news for BD and China!

Chinese are certainly not doing this for charity. It is to feed the fast growing BD economy and they will be richly rewarded for their multi-billion dollar investment here in the years to come.

@wanglaokan

China is a friend indeed. Other countries could have made the same investment but out of racism or selfishness chose not to do so.

 

[bluesky]

BD finally has a stable government that will be in power for at least another 5 years.

Will you stop talking about BAL chetona propaganda?

 

[naveen mishra]

Most people not involved in the industrial sector in Bangladesh realize how big of a deal this is going to be - but I consider this to be huge and not just for the steel sector but in terms of growing industrial capability.

It is way beyond the current norm of scale of production for cold rolled sheet, mainly used for roofing usage nowadays, but eventually to be used for automotive stamped sheet feedstock.

Currently Karnafully and PHP are larger producers (the latter with 120,000 TPA), There are smaller specialty producers as well. But this one from KunMing Group is 2,000,000 TPA and that is just the first unit....

Karnafully Steel Mills

PHP Steel Mills

PHP ,abul kher,and KDS has strong financial condition , they are capable enough to invest in steel making or integrated steel plan ,
3 year back PHP was initiating for investment in steel making ,

 

[Mage]

i personally feel connected with BD people, and i.hope the relationship between China and BD will be further enhanced l.

 

[Bilal9]

PHP ,abul kher,and KDS has strong financial condition , they are capable enough to invest in steel making or integrated steel plan ,
3 year back PHP was initiating for investment in steel making ,

I believe the Kunming Group investment will only meet partial cold rolled sheet demand locally although their design capacity is 2,000,000 TPA. There is plenty of scope to put in additional capacity and investments.

Pacific Group is another one I heard of. They already assemble some Chinese utility trucks (plenty of demand locally) and they may set up some cold rolled sheet capacity as well for roofing demand or already have. They reportedly are using NOF technology for galvanized zinc coatings for the roofing product which enjoys a large market.

http://www.nofmetalcoatings.com/corporate/en/contact-us.xhtml

 

[Nilgiri]

Everyone has his way of seeing things. But, who denies the prospect of creating 30,000 jobs, anyway? Today, BD imports many of the steel items that I have listed. So, an integrated steel mill will certainly be able to supply those goods to the BD market. As far as I understand there is a glut of steel products in the international markets including that of China after its Olympic events. So, it is possible that much of the products will be consumed within BD. This will stabilize the local steel supply and prices.

Problem with the figure is 30,000 jobs is way too high for 2 MT capacity. (5 times more inefficient than the global norm).

At global average (about 330 tonnes per worker per year), the jobs created would only be around 6,000....plus minus some amount depending on corollary activities setup. As comparison, the recent steel mills currently recently finished or under construction in India have 10 MT steel capacity output for 30,000 jobs.

This (if this ratio is true for this project) has all the hallmarks of another debt trap provided by a loanshark nation with increasing numbers of zombie steel enterprises (among other heavy industry sectors generally)...combined with a corrupt kickback friendly receiving govt (who will also have their minions and thugs benefit).....i.e over invoice the capacity transfer through extremely old mothballed equipment with 5 times less labour efficiency than the current standard....to create a long drawn out debt extraction, largely dictated by current and future seignioriage trends of the USD (esp when its stagnant stockpiled to the degree of trillions that China does).

Combine this with such ham-fisted approach of the receiving govt to this industry (and more importantly the demand industries like transportation where the duties continue to be of in crazy-high region, leading to just 600 cars being assembled in BD each year), and it is clear who is going to benefit (loanshark + few elite) and who gets stuck with the bill long term (people, most not even born yet):

https://www.thedailystar.net/business/steel-millers-oppose-15pc-vat-rod-1403842