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03 March 2024

Business Insider Bangladesh

SS Steel to acquire assets of Super & Peninsula Steel

BI Report || BusinessInsider

Published: 23:31, 27 November 2023  
SS Steel to acquire assets of Super & Peninsula Steel

Photo: Collected

As part of a plan to widen the scope and nature of the company, SS Steel Limited, a listed steel manufacturer in Bangladesh, is moving forward to acquire the fixed assets of both Super Steel Limited and Peninsula Steel Mills situated at Sitakunda Kadamrasul in Chattogram.

The fixed assets include land (164 decimal), a steel structure shed, a building, capital machinery, and utility services connections, with a cumulative estimated value of Tk130 crore, as disclosed by the company in a filing with the Dhaka Stock Exchange (DSE) on Monday, reports a press release.

This acquisition aligns with the company's dedication to augmenting production capacity, leading to an additional annual capacity of 62,400 tonnes of MS rod.

Following this expansion, the total annual capacity is anticipated to reach approximately 442,800 tonnes of MS rod.

To fund the strategic initiative, the invested amount will be resulting from the company's retained earnings and in part, secured from financial institutions and banks through the company, as stated in the disclosure.

Since its inception in 2001, SS Steel has been engaged in the production of MS billet and MS rod, transforming raw material scrap into finished goods.

Throughout the years, the company's products have been exclusively selected for constructing significant national landmarks and infrastructure projects.

In a span of nearly three years, SS Steel is poised to make its third acquisition in the steel plant sector, acquiring the fixed assets of Super and Peninsula Steel.

This strategic move is aimed at further amplifying its production capacity.

In August 2020, SS Steel acquired Saleh Steel Industries based in Chattogram, and subsequently, in March 2022, they completed the takeover of Al-Falah Steel & Re-Rolling Mill located in Narayangonj.

“As part of our sustainable business plan, we are concentrating on enhancing our production capacity. In this context, we have identified Super & Peninsula Steel Limited as the right choice for us, given its ready factory setup and substantial potential. Consequently, our board of directors has resolved to acquire their fixed assets," said Javed Opgenhaffen, chairman of SS Steel.

"Hopefully, this initiative will strengthen our competitive edge as we can promptly turn the plant into operational and generate value for the company and our customers," he added.

Steel-producing companies are concentrating on boosting production through the expansion of modern technology and facilities. The growth of the steel sector in Bangladesh can be attributed to the implementation of mega projects, the development of economic zones, and the rise in building construction, especially in villages, fueled by expatriate income.

Situated in Tongi on the outskirts of Dhaka, SS Steel markets its products under renowned brand names such as SS Tiger B400 DWR/60G TMT bar and SS Tiger B500 CWR TMT bar.

SS Steel and its affiliated steel manufacturing units currently boast a collective annual turnover of approximately Tk 2,150 crore, with expectations to reach Tk 3,000 crore in the next financial year.

Currently, 40 modern and 150 traditional steel factories are operating in the country.

The average per capita steel consumption in Bangladesh is estimated at 45kg. It is anticipated that by 2030, this demand will surpass 100kg per capita.