The proposed investment by Tata Group in steel sector will in no way hamper the interest of local manufacturers, according to the resident director of Tata Group.
"Tata will produce the hot rolled (HR) coils, particularly to support the cold rolled (CR) sheet producers. The local steel manufacturers do not produce this product… So, Tata will never become their competitor," said S Manzer Hussain in an interview with the news agency.
He said instead of impeding the growth of the local steel manufacturing industry, particularly those producing MS rod, Tata will support the CR sheet producers.
The local steel manufacturers, particularly the operators of steel and re-rolling mills, expressed sharp reaction to the recently submitted revised proposal of the Indian industrial conglomerate for setting up a steel plant with a production capacity of 2.4 million tons per annum.
The local steel producers apprehend Tata's steel plant will be a great threat to their units -- about 100 steel mills and 300 re-rolling mills -- which presently produce about 2 million tons of MS rod.
They said the industrial units, developed by the local entrepreneurs through an investment of about Tk 5,000 crore, will face closure if Tata's heavyweight steel plant comes into operation.
In a recent press conference, the local producers urged the government not to allow the Tata Group to set up its steel plant for the sake of protecting the local steel industry.
But Tata officials totally disagree with the concerns of the local steel manufacturers.
Explaining the project, Manzer said the Tata steel plant will produce hot rolled coil from iron ore as primary raw materials for the local cold rolling mills and tube industry.
The shipbuilding industry can 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 that mainly produce corrugated sheets.
These plants include Rahim Steel, PHP, Abul Khair, Apollo, RM Steel and NGS. The annual requirement of hot rolled coil by these factories is about 0.8 million tons a year.
All the mills in the country import HR coils worth US$ 500 million 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 plants.
"Actually, Tata steel plant in Bangladesh will substitute those imported raw materials saving huge amount of foreign currency for Bangladesh," Manzer said.
He said after meeting the local demand of the HR coils, Tata will 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.
"Tata will never go to produce MS rod or those products the local manufacturers have been producing," the Tata resident director said.
He mentioned Tata will 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.
Manzer said the Tata steel plant will create about 3,500 direct employment for Bangladeshis while the indirect employment will be triple.
He said Tata will establish a training institute and a 100-bed general hospital in its steel project area as part of its social welfare services.
