Bangladesh’s BMSIL to Become the Country’s First Rebar and Wire Rod Producer
Bangladesh is on the verge of a groundbreaking transformation in its steel industry with the upcoming Bashundhara Multi Steel Industries Limited (BMSIL) plant. Set to establish the world’s largest single-strand mini mill for long steel production, BMSIL will be the country’s first producer of both rebar and wire rod. This project marks a significant milestone in Bangladesh’s industrial development, reducing its dependence on imports while boosting local employment and economic growth.
BMSIL’s ambitious steel plant, located in the National Special Economic Zone in Mirsarai, Chattogram, is expected to commence production by mid-2026. Once operational, the plant will have an annual production capacity of 1.25 million metric tons of rebar and wire rod, positioning itself as a major player in the country’s steel market. The project, initially estimated to cost BDT 37 billion ($304.32 million), is now projected to cost BDT 47 billion ($386.57 million) due to the depreciation of the local currency.
Beyond its economic impact, this initiative will create over 3,000 jobs, significantly contributing to employment in the region. It also introduces advanced technology that enhances production efficiency while reducing costs, making steel products more affordable for the construction and manufacturing sectors.
Bashundhara’s Steel Plant (BMSIL) Set to Start Production By Mid-2026
BMSIL is poised to revolutionize Bangladesh’s steel production sector with its high-tech approach. Unlike traditional steel plants, BMSIL will use cutting-edge technology that enhances efficiency, lowers costs, and improves product quality.
One of the most remarkable features of this plant is its use of world-renowned Italian technology from Danieli’s MIDA®-Q—a process known for its energy efficiency, sustainability, and endless casting and rolling capabilities. This advanced method is expected to reduce the production cost per ton of steel by approximately Tk3,000 compared to conventional methods. The result is high-quality steel products at competitive prices, which will benefit both domestic industries and consumers.
Additionally, BMSIL’s rebar and wire rod production will serve as a significant import substitute, helping Bangladesh save approximately $250 million (Tk3,000 crore) in foreign exchange that would otherwise be spent on importing these materials. This move is particularly crucial as Bangladesh continues to develop its infrastructure and expand its industrial sector.
Why Is This Investment in Steel Crucial for Bangladesh?
Bashundhara’s new investment comes more than 20 years after a previous attempt to establish a steel manufacturing venture in Manikganj failed due to location-related challenges. The new project, however, is strategically positioned in Bangladesh’s largest economic zone, ensuring better logistics, accessibility, and utility supply.
The demand for steel in Bangladesh is steadily increasing, driven by rapid urbanization and infrastructure development. Currently, per capita steel consumption in Bangladesh is around 55 kg, significantly lower than in neighboring countries such as India (93.4 kg), Japan (432.5 kg), and the USA (266.3 kg). By 2030, Bangladesh’s steel consumption is expected to reach 95 kg per capita, highlighting the growing demand for locally produced steel.
Between 2018 and 2023, Bangladesh’s steel production grew by approximately 64%, reaching 9 million tons. However, the country still faces a shortfall of 800,000 tons, which this new project aims to bridge.
Tk 37 Billion Green Steel Project in Disarray: Challenges in Bangladesh’s Industrial Expansion
Bangladesh’s ambitious Tk 37 billion green steel project, undertaken by Bashundhara Multi Steel Industries Limited (BMSIL), is facing significant challenges due to a lack of utility support, policy backing, and funding issues. The project, which was expected to revolutionize the country’s steel industry by introducing eco-friendly steel production, is now in a state of uncertainty.
Launched in 2021, this project was expected to start production by mid-2026 using cutting-edge, low-carbon emission technology from Italy’s Danieli’s MIDA, a globally recognized leader in the steel manufacturing sector. However, delays in securing necessary utilities, infrastructure, and financial backing have jeopardized the completion timeline, raising concerns over its feasibility and future sustainability.
In addition to these challenges, Bangladesh’s power supply sector is bracing for a significant shortfall during the upcoming peak summer season, further complicating the industrial landscape. Let’s take a deeper look into the obstacles faced by BMSIL and the broader issues in Bangladesh’s energy sector.
BMSIL’s Green Steel Project: A Vision in Trouble
1. Utility Shortages and Unfulfilled Commitments
BMSIL had secured approvals for essential utilities, including:
- 3 MMSCFD of natural gas from Karnaphuli Gas Distribution Company Ltd. (KGDCL).
- 6 MLD raw water supply permission from the Bangladesh Economic Zones Authority (BEZA).
- 200 MW of power allocation by the Bangladesh Rural Electrification Board (BREB).
However, despite these initial approvals, BMSIL has had to bear significant infrastructure costs for installing gas pipelines, substations, transmission towers, and power lines. This unexpected financial burden has placed the company under immense pressure, as there remains uncertainty over whether the utilities will be available on time.
For instance, the company has already spent Tk 2.52 billion on power transmission lines. However, if the power supply is not fully available when the plant is ready to operate, it could lead to inefficiencies, increased costs, and potential production delays.
2. Financial Roadblocks and Loan Suspension
One of the biggest setbacks for BMSIL has been the suspension of loan disbursements by banks, creating a severe financial crisis. The project is co-financed by a syndicated loan of Tk 23.05 billion from eight banks. However, after disbursing only Tk 5.4 billion, the banks halted further funding, citing regulatory restrictions.
This unexpected financial bottleneck has had a ripple effect on the project’s operations:
- Raw Material Stuck at Ports: Due to the suspension of loan disbursements, BMSIL has been unable to release Tk 2.0 billion worth of raw material consignments stuck at ports.
- Demurrage Costs: The company is incurring Tk 970 million in demurrage charges, further straining its finances.
- Rising Project Costs: Due to delays and fluctuations in currency exchange rates, the overall project cost has surged by Tk 10 billion, bringing the total cost to Tk 47 billion.
Industry experts argue that blocking investments in approved loans while favoring defaulting borrowers sends a negative signal to responsible businesses. BMSIL officials have urged the Bangladesh Bank to intervene and remove the barriers to loan disbursement.
3. Employment and Economic Impact
If completed successfully, this green steel project will significantly reduce Bangladesh’s reliance on steel imports. The factory, spread over 70 acres, will be the first in the country to produce rebar coils and wire rods—products that Bangladesh currently imports at a high cost. This project could potentially:
- Save $250 million in foreign currency annually.
- Create direct employment for 3,000 people.
- Boost the local economy by creating supply chain opportunities for smaller businesses.
However, these benefits can only be realized if the project overcomes its financial and infrastructural hurdles.
Challenges Facing the BMSIL Project
Despite its potential, the BMSIL project is not without challenges. The company is currently facing financing difficulties and shipment delays, which could slow down the plant’s completion.
1. Financing Issues
BMSIL had initially secured a syndicated loan of Tk2,305 crore from eight banks, but so far, only Tk540 crore has been disbursed. Due to the depreciation of the Bangladeshi Taka, the project now requires an additional Tk1,000 crore to reach completion. The company has formally requested an increase in the syndicated term loan by Tk447 crore, but approvals are still pending.
2. Shipment Delays and Port Congestion
BMSIL currently has consignments worth Tk200 crore stuck at the port due to financing-related delays. This situation has led to daily demurrage charges accumulating to over Tk100 crore, adding to the financial burden on the project.
3. Infrastructure and Utility Challenges
The factory’s infrastructure is still under construction, and a jetty planned for the Sandwip Channel—to facilitate the import of raw materials—has yet to commence construction. While BMSIL has received approvals for 3 mmscfd of natural gas, 6 MLD of raw water, and 200 MW of power, it remains uncertain whether these utilities will be fully available on time when the plant starts operations.
4. Currency Depreciation and Rising Costs
The local currency devaluation has significantly increased the cost of imported machinery and materials, pushing the total project cost to Tk4,700 crore. This financial strain makes securing additional investment a critical challenge for BMSIL.
Power Crisis in Bangladesh: A Looming Threat
While industrial projects like BMSIL struggle to secure reliable power sources, Bangladesh’s national power grid is also facing a severe challenge.
Although authorities managed power and gas supplies smoothly during Ramadan, they are now bracing for a potential power crisis during peak summer, expected from April 15 to September 15.
1. Rising Electricity Demand and Supply Deficit
Bangladesh’s power demand is expected to exceed 18,000 MW in peak summer, which could lead to a shortfall of 3,000 MW.
- Recent Load Shedding Trends: On March 20, when power demand reached 13,700 MW, the country faced 215 MW of load shedding—the highest in recent weeks.
- Highest Demand in Recent Days: On March 19, evening peak demand hit 14,700 MW, while supply stood at 14,500 MW.
The country’s current supply infrastructure is already strained, and as temperatures rise, demand is expected to outpace supply, causing widespread power outages.
2. Gas Supply Constraints Affecting Power Generation
Gas remains the primary energy source for Bangladesh’s power plants. Currently:
- 6,500 MW of electricity is generated from gas-fired power plants.
- Total gas supply stands at 2,877 MMCFD, against a demand of 3,800-4,000 MMCFD.
- Imported LNG contributes 1,000 MMCFD, while local production covers 1,877 MMCFD.
Petrobangla officials warn that even though additional LNG cargoes were imported during Ramadan, Bangladesh may struggle to secure enough gas imports for the summer due to re-gasification capacity limitations.
With two LNG terminals operating at their maximum capacity of 1,100 MMCFD, the government cannot increase LNG imports beyond nine cargoes per month—five from long-term contracts and four from the spot market.
This means that unless gas supply increases to at least 1,200 MMCFD, power shortages are inevitable.
3. Shift to Alternative Energy Sources
To mitigate the crisis, Bangladesh is increasing reliance on coal-fired and furnace oil-based power plants:
- Current Power Mix:
- 5,600 MW from gas-fired plants.
- 4,500 MW from coal-fired plants.
- 2,500 MW from furnace oil-based plants.
- 2,500 MW from imports and other sources.
- Summer Strategy:
- If gas supply does not improve, authorities will ramp up coal-fired and furnace oil-based power generation.
- However, these alternatives are costlier and less environmentally friendly, posing long-term sustainability concerns.
Despite these efforts, officials anticipate power cuts of at least 2,000 MW during peak summer, affecting both households and industries.
The Future of Bangladesh’s Steel Industry
Despite the challenges, the long-term outlook for BMSIL remains promising. As Bangladesh’s economy continues to expand, the demand for steel is expected to rise sharply.
With local production of rebar coil and wire rod, BMSIL will not only meet domestic demand but also reduce import dependence, strengthening the country’s steel sector. Furthermore, by introducing energy-efficient and environmentally friendly production methods, BMSIL is setting a new benchmark for sustainable manufacturing in Bangladesh.
In addition, the project’s direct employment of 3,000 workers and the development of local supply chains will have a ripple effect on the broader economy, stimulating growth in various sectors, including construction, logistics, and energy.
Conclusion: A Critical Crossroads for Bangladesh’s Industrial and Energy Future
Bashundhara Multi Steel Industries Limited’s bold investment in the steel industry marks a major turning point for Bangladesh. By establishing the country’s first rebar and wire rod production facility, the company is taking a crucial step toward self-sufficiency in steel manufacturing.
Despite facing financing delays, rising costs, and logistical challenges, the project’s potential benefits far outweigh the hurdles. BMSIL is expected to boost industrial growth, reduce import dependency, and enhance Bangladesh’s competitiveness in the global steel market.
With its cutting-edge technology, massive production capacity, and strategic location, BMSIL is poised to transform Bangladesh’s steel industry, paving the way for a more sustainable and self-reliant future.
The Bashundhara Multi Steel Industries Limited (BMSIL) green steel project was poised to become a game-changer for Bangladesh’s steel industry, reducing import dependency and fostering economic growth. However, policy delays, financial obstacles, and utility shortages have thrown the project into uncertainty.
At the same time, Bangladesh’s national power sector is preparing for a major summer crisis, with potential load shedding of 3,000 MW. If gas supplies remain constrained, industries like BMSIL could face further delays and operational inefficiencies.
To prevent these challenges from escalating, urgent action is needed. The government must:
- Ensure timely disbursement of approved loans to keep industrial projects on track.
- Guarantee infrastructure support for essential utilities like gas and electricity.
- Expand LNG import capacity to meet growing energy demand.
- Accelerate alternative energy investments to reduce reliance on fossil fuels.
Without decisive action, Bangladesh risks stalling its industrial growth, discouraging investors, and facing prolonged economic uncertainty. The coming months will be crucial in determining the country’s ability to navigate these challenges and sustain its economic progress.
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