Bangladesh

Engineering
&
Re-Rolling Mills LTD.

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 Bangladesh Engineering & Re-Rolling Mills LTD

Sitting on his couch trying to solve the financial disaster that his industrial unit is
going through, Mr. Khayaj Ahmed Milon tries to commit to memory what this Steel
Re-Rolling industry used to be. With increasing energy predicament, raw material
dilemma, government negligence and regular troubles with workforce, the Steel Re-
Rolling Mills of Bangladesh are in front of weighty breakdown for past few years.
There are also troubles for not having quality assurance and documentation
ethnicity, lack of support investment in new technology, and imperfect right of entry
to commercial and development finance.

Re-rolling mills are essential parts of our financial system as they contribute in the
steel bars for our construction industry. The re-rolling mill business in Bangladesh
has not added much capacity over the last 20 years and has not incorporated new
technology and has not capitalized on the export markets. The industry association
has principally paid attention on challenging monetary incentives and on
encouragement. The industry does not measure up to constructively with re-rolling
mill industries in other countries. Bangladesh Engineering & Re-Rolling Mills LTD. is
one of the strugglers of this industry, having Mr. Khayaj Ahmed as acting Managing
Director. However, Bangladesh has emerged as a competitor to major steel-making
and re-rolling countries Japan, South Korea, Brazil, Russia and India with strongholds
in African markets, due to the countrys low production cost and high quality of the
items. About 85,000 tons of steel products were exported to the African countries
last year, industry insiders say. So with the related industry expansion, the goodwill
is there, and the country just needs to focus on progressing further with the re-
rolling of those steel products. However, the internal scenario is quite different when
we look deep into the industry.

Steel Re-Rolling Industry of Bangladesh:

This industry under small scale sector has also penetrated into world market only
due to its strong will, low investment and relentless efforts to overcome the
obstacles. The substantial quantities of steel rolled products are being exported to
the various parts of the world in addition to all neighboring countries like India,
Nepal and Bhutan. Various fabricated and steel items, which are produced out of the
rolled products, are exported to the most developed countries of the world like USA,
Canada etc.

A recent statistics will show what dire strait the steel mills and ship breakers of the
country are in. Needless to say, they are finding it harder to keep their factories in
operation due to sharp fall in import of the necessary raw materials. The ship
beakers imported around 300,000 tons worth of scrap vessels during the months
between July and February during the current fiscal, which is the lowest in recent
history. For just in the previous fiscal, the volume of scrap vessel import was 1.12

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million tons. The volume of import was more or less around the same figure at 1.01
million tons in fiscal 2005-06 and 1.76 million tons in the fiscal 2001-02.

In comparison to the previous records of import, one must say that the steel industry
of the country is passing through one of its worst times in history. Steel is a basic
sector of any industrial economy. Except re-rolling of the scrap steel, Bangladesh
lacks this very basic ingredient of heavy industry. And without heavy industry, the
slogan of industrialization sounds hollow. The idea of developing a viable steel sector
appears implausible seeing that Bangladesh has no iron ore as one of its mineral
resources. But absence of ore does not disqualify a country from becoming a
producer of steel and steel-based commodities. The classic example before
Bangladesh in this respect is Japan. That Japan has surpassed even Europe and in
some respects America in its industrial superiority is due to the fact that its industry
stands on a very strong base of steel. What Japan did was it imported the iron ores
and converted those into steel in its own factories.

No dream is distant if one has the necessary will to materialize it. Bangladesh cannot
forget the fact that neighboring India is an emerging steel giant in the world. So, if
Bangladesh intents on developing a strong steel base for its industry, it can import its
iron ores various sources.

However, leaving such prospect of building a basic steel industry to the hands of the
future, we can at least do something for the existing industrial units of the country
that add value to the imported scrap steel and keep the building industry afloat. As
mentioned previously, the local steel industry is in the doldrums due to skyrocketing
price of the necessary raw materials in the global market. The government needs to
come in a big way to help out.

Steel makers of the country say, to save the industry, the government will have to
first withdraw all the duties on the import of scrap steel. That includes both scrap
vessel and melting scrap. The importers have cited the example of India, which has
already done the same. There is also an anomaly in the tariff structure that needs to
be rationalized. The tariff on the scrap vessel is BDT 1000 per ton for the ship
breakers whereas for the operators of steel and re-rolling mills the amount is about
four times as high at BDT. 38,00 per ton. So, to save the local steel industry, the
government may follow the footstep of India by withdrawing the duties on scrap
steel import until the price for the same comes down to a tolerable level in the
future.

Though the local steel industry in its present form may not look as glamorous as the
garments, who knows, given the necessary support, one day it may also turn into a
formidable industry and earn foreign currencies. Steel industry, however small,
cannot under any circumstances be ignored, for it is the mother of all industries.

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Key Players in the Arena

Steel manufacturers see no major negative impact on their industry as they believe
the countrys economy will keep its impressive growth despite the global financial
recession. They said the country with nearly six per cent growth in the last three
years provides enough clues to consume higher production of mild steel rod to be
generated by the big players with their proposed new investments.

BSRM, producer of high-grade steel, makes up more than 25 per cent of the total
demand. It is now on trial production in its newly installed 3, 00,000-tonne plant, set
up at a cost of over BDT 3.5 billion. It has also unveiled plans to invest another BDT
500 crore to raise its capacity to around one million tons within the next five years.
Following the footstep of the company, Kabir Steel and Re-rolling Mills is setting up a
3, 00,000-tonne mild steel rod plant in Chittagong. One the other hand, KSRM
announcement came just a month after the countrys largest conglomerate, Abul
Khayer Group, formally entered the sector, unveiling a BDT 700 crore investment for
an 8,00,000-tonne plant.

Another Chittagong based mill Ratanpur Steels and Re-rolling Mills has said it
has started marketing 75-grade mild steel rod since late last year from its BDT 200
crore state-of-the-art steel factory.

Trade experts and bankers, however, expressed concern that the latest investment
boom in rod, a key construction component, will outpace the countrys annual
demand for rod and might result in investment glut. The countrys fast growing
construction industry uses nearly 25 lakh tons of rods every year, the market price of
which is BDT 1,000 crore. More than 200 re-rolling and steel mills are producing steel
products by using imported and locally available ship scraps. Only a few steel
factories use imported billet to produce high quality mild steel rod.

Statistics of Steel Re-Rolling Mills:

Talking about still re-rolling mills of Bangladesh, we should take a look at the
statistics. There are around 250 steel re-rolling mills situated all over Bangladesh,
especially around Dhaka city. Employing around 16000 people on every fiscal year as
permanent employees, hardly 1000 of them are female workers. Average age of
machines is around 18 years. Every Year around 2.4 million tons of Rebar is produced
by Bangladeshi Steel re-rolling mills. However, national demand for steel bars is
around 2 million tons. Raw material demand for these Re-Rolling Mills is around 2.6
million tons. There are various sources from where the industry gets its raw
materials. They get around 1.5 million tons from local recycle waste metal, 0.4
million tons from ship breaking, 1.6 million tons from imported re-rolling scrap,
billets and melting scraps.

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History of Bangladesh Engineering & Re-rolling Mills LTD.:

The set up of Bangladesh Engineering & Re-Rolling Mills LTD. carried out in late 1967,
where the name was Engineering & Repairing Mills. With MD. Nurul Afsar leading
the Technical Department of the mill, the production and activity of the factory was
running at its best. This Engineering & repairing companys main department was
workshop, where they used to repair and manufacture the re-rolling mills
machineries. However, in 1971 the separation of Bangladesh and Pakistan, as we
know the Independence War of Bangladesh, the activity of the mills around the
country was clogged. MD. Nurul Afsar did not lose hope and waited for the war to
end to reopen the mill. With high experience and countless contribution and effort
of his and his employees, he resurrected this workshop with his own investment of
BDT 2.5 lakh on 18th February, 1972 at Mogbazar.

The aftereffect of the war was there, and it was very hard for companies like this to
work inside capital with almost unavailable working force. Mr. Afsar was
determined, so he looked for joint ventures to move on, also a place where he will
get sufficient workforce. Luck smiled upon him and one of his relative was eager to
work on this project. The joint venture agreement took place and Bangladesh
Engineering & Re-Rolling Mills LTD. was born. On 5thJune, 1983 at 138 Pagar, Tongi
with BDT 3 crore as an investment, Bangladesh Engineering & Re-Rolling Mills LTD.
started its journey, with three executive members and around 30 workers. They set
up their own machineries and started producing steel bars.

Things were going smooth till 1991, the year Mr. Afsar passed away and as per
agreement, the companies ownership handed over to Mr. Khayaj Ahmed and he
became the acting managing director. Khayaj Ahmad, the present head of
Bangladesh Engineering & Re-Rolling Mills LTD. is a man of supreme dedication and
is also a completely self-made man. Born in 8th March 1956, Khayaj Ahmad finished
his SSC in 1976 and his HSC in 1978.

Later, he finished his Diploma in 1982 in Mechanical Engineering and then joined
Bangladesh Engineering & Re-Rolling Mills LTD. with his brother Mr. Afsar. But after
the death of his brother in 1991 the companys whole account and responsibilities
were handed over to him and his brothers wife, Hosne Ara Begum with her two sons
Anoar Hossain and Daloar Hossain. Though the former partners were inactive
partners with no significant involvement in the business, Khayaj Ahmad monitored
the operational activities and also the administrative works whenever required, and
also all the production activities. As Khayaj Ahmad handles the whole mill, the
pressure was too much for him. He had the wish to reopen the workshop sector and
a Garments factory of his own, but he simply could not manage time to do so.

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Values:

Having hard time with employees, clients and customers, and needless to say
workforce, it is hard for this organization to uphold their values and norms.
Bangladesh Engineering & Re-Rolling Mills LTD. focus their ethical values mostly for
their customer satisfaction; so that they can support a good superiority of products
and get their standing to an A-Class steel rebar providers. As per Bangladeshs
leading rebar providing company Bangladesh Steel re-rolling Mills limiteds graph,
50% of market share are owned by BSRM. However, for their technological support
and raw materials which are mostly imported, Bangladesh Engineering & Re-Rolling
Mills LTD. makes their own machines and fulfills the customers satisfaction by new
inventions and demand of customers.

As the demand of their product were huge so their vision and mission was to be a
symbol of quality steel made rerolled products. Their constant try in innovations and
product development had helped them to achieve what they are today one of the
top industrial and professionally managed organizations in the industry.

The Stakeholders:

Like every other limited companies, this organization also have a list of shareholders
who expect profits from the activities of the company. The stakeholders of
Bangladesh Engineering & Re-Rolling Mills LTD. are

The owners who are: MD. Nurul Afsar (passed), Hosne Ara Begum, Khayaj
Ahmad, Anoar Hossain and Daloar Hossain.
Creditors and equity holders of the organization
The society in general (mass general, the public, the consumers)
The clients and customers
The managers, employees, and staffs
The suppliers, distributors and locally affiliated organizations.

The Customers:

Customers are big factors for steel re-rolling mills of Bangladesh, as there are too
many companies with well established factories and facilities. Bangladesh
Engineering & Re-Rolling Mills LTD. is primarily focused to provide corporate clients
which are fixed for them and some relatives or requested persons with requirement
of steel rerolled products, like MS rods and channels. However, in specific cases,
depending on potential and prospects of particular projects it may also accept
accounts of middle or small organizations, but they will be for sure in lower profile of
Bangladesh Engineering & Re-Rolling Mills LTD.s overall operations.

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Location:

Speaking of location, Bangladesh Engineering & Re-Rolling Mills LTD. has chosen the
best possible place to establish their factory. Tongi and Gazipur, both areas are
renowned as Industrial Zones of Bangladesh. Bangladesh Engineering and Re-Rolling
Mills LTD. is located in Pagar industrial area of Tongi, where they have 6.5 bighas of
land dedicated for their mill. There are other steel rerolling mills situated in this
industrial area because of the availability of cheap labor force and good
transportation facility. The placing of the factory was perfect till problems related to
energy and clash with unions increased.

This company provides some sort of clean working arrangement, as they have
separate toilets, a small pond inside the mill and have building for housing facilities
for free, a prayer place and there are places where employees can have their food.

Factory Layout:

The factory consists of these buildings and sections:

1. Administrative Building
2. Gas Cutting Unit
3. Shearing Unit
4. Burning Furnaces
5. Forging Stands
6. Workshop
7. Finished goods gathering place
8. Storage
9. Housing Unit

Administrative Building

The admin building is a 3 story building, consists the office for Managing Director,
the finance department and the marketing department.

The ground floor has 3 rooms. First one is for the security guards, which is adjacent
to the entry gate of the premises. Visitors and outsiders are first required to get into
the reception area guarded by the security guards, and then are allowed to enter as
necessary. The second room is for the admin supports, usually the cleaners and
office assistants wait here for their tasks to come up. And the third room is kept for
the administrative storage unit; spare stationeries and office equipment are stored
here.

The second floor consists of four rooms, the office for Managing Director, one
common room for MD secretary and legal assistant, and two more rooms for
General Managers of Marketing and Finance Department. The secretary common
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room is adjacent to the MDs room, and followed by two GMs room adjacent to the
stairs.

The third floor consists of three rooms, Admin managers (The manager and
supervisor), Accounts office (the room for accountant and the cashier), and office for
supply chain management (for purchase and billing officer).

There are three other official personnel rooms available in the premises, one for the
Inventory Manager and Inventory officer, located in the storage building. And the
two others are for General Manager of Production and Managers of Floor Operation
and Workshop, located adjacent to the forging stands.

However, due to financial constraint and energy shortage, the office has been switched
to Mr. Khayaj Ahmeds apartment in 2005 and his living room is currently being used for
office purpose. The administrative building will be closed until the problems are
resolved.

Gas-Cutting Unit

Here, eight Gas cutters work from 8am to 5pm, cutting and shaping steel scraps into
shear able metal pieces.

Shearing Unit

Shearing Machines are provided with extra overload protection and safety features
enables it for easy and safe use. The roller guide is made up of hardened and quality
raw material that enhances its quality of cutting for a longer period of time, making
it more durable. Here, 18 people work (3 in each shearing machine) in two shifts
(8am to 5pm and 8pm to 5am), who shears the steel scraps into small rectangle
pieces of steel.

Burning Furnace

Furnaces are essential for proper heating and melting of steel in steel plants. Here,
12 people work (3 in each furnace) for alternative shifts (3 shifts a day).

Forging Stands

In the forging stands, melted steel pieces are put into three roller entry guide box
and twist pipes to shape the melted steels into rods. Also, there are two
straightening machines for section, bar & rod, and wire rod. Total 60 people work in
forging stands (12 in each stand). Their working shift time is very minimal; none of
them are allowed to work more than consecutive three hours due to overheating
work conditions.

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Workshop

There is a workshop in the premises, where different mechanical parts of the

machines used in factory are built, or repaired, when necessary. Three people work
in the workshop are, 2 for repair works and 1 for welding tasks.

Finished goods gathering place

Here, six people work in alternative shifts (3 shifts a day) to gather the shaped rods
and bars into one place, from where the carriers take them into storage.

Storage

This is the inventory unit for the raw materials as well as the finished goods. Here,
the products are kept and inventoried for the later usage.

Housing Unit

Housing unit consist of a 1 story building with 6 rooms, for the workers who are
required to work overtime or overnight shifts additional to their normal work hours.
When the workload becomes high the workers are required to work longer hours,
and if necessary, they can use the housing unit to stay for a day of two.

Nature of Business:

Like other steel rebar producing companies of Bangladesh, Bangladesh Engineering

and Re-Rolling Mills LTD have their fixed product line. Their Product Lines are,

Product Name Product Size

MS Rods Xtreme-500W 10 mm to 25 mm
MS Rods (GR-400) 10 mm to 25 mm
MS Rods (GR-300) 10 mm to 20 mm
WIRE ROD (WR-8) 5.5,6 & 6.35 mm
SPRING STEEL FLAT BAR 70, 76 & 80mm

Employees:

Employees are the blood of an organization, as they are the people who actually
manufacture the products. Bangladesh Engineering & Re-Rolling Mills LTD. first made
the steel manufacturing machineries; they were supposed to use full time
employees. The expansion of re-rolling mills forced them to use these full-time
employees, but around 1986 to 1990, they had huge problems by unions and
production got heavily hampered. Therefore Bangladesh Engineering & Re-Rolling
Mills LTD. changed their policies in 1992.
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Permanent Employees:

Bangladesh Engineering & Re-Rolling Mills LTD.s maintains very few permanent
employees now. As the gas and electricity troubles are too much to worry about
these days, the production mainly starts at night around 9:00PM till 9:00AM, but the
workshop always maintains the official rule as 9:00AM to 6:00PM. The companys
permanent employees are Production manager, Floor in Charge, Line heads and
Supervisors.

Contractual labor force:

Though Bangladesh Engineering & Re-Rolling Mills LTD. has permanent employees,
the production sector started using contractual labor after 1992. Their salary is
based on weekly basis where for each sector they maintain separate contracts. The
main sectors that the company focuses on are - Gas Cutting Unit, Shearing Unit,
Burning Furnaces, Forging Stands, Finished goods gathering Storage etc.

However, the contracts are concentrated by estimation based on examples, like

whenever any customer wants 40 tons of steel the organization rates it this way:

Cutting per ton 200tk

Shearing per ton 300tk
Burning per ton 400tk
Finishing per ton 300tk

Core Activity:

The core activity of the company is manufacturing quality steel bars and supplying of
steel re-rolling goods and machineries including hot rolling bars and cold rolling bars.
Bangladesh Engineering & Re-Rolling Mills LTD. manufactures individual components
of steel goods as well as complete mini steel goods. They are used for reducing,
coating and finishing the thickness of metal strips.

COMPANY SITUATION

Most of the workers are in the manufacturing sector and the factories are based on
male workers, and Bangladesh Engineering & Re-Rolling Mills LTD. does not
discriminate the gender. However, concentrating on the work situation and risk
factors for the workers, they have to be male because men are more attentive and
efficient in technical, heavy and risky machines and proqurement sectores.
Therefore, like other steel re-rolling factories, this company has to consider male
based work place.

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Though the employments are contractual and male based according to the law of
protecting the employees, all manufacturing industry has to follow some safety rules
in the factory premise. From the very beginning, there is always a risk of short circuit
of electricity in any re-rolling mills. The environment always stays dry and hot and
there is too much dust to the mills in the air, making it poluted. Many types of
diseases can spread very easily in that favorable environment. Other than that
employees may face hit and sound problems where they maintain their level best to
comfort their nerves by dirnking water and use cotton to make themselves work
efficient and noise resistant. They get these by their own and company provide fans
for each hitted sectors. In burning units, the employees can not work for long time,
so they work 1 hour and then other fresh workers come for next 1 hour and so on.

As the employment system are contractual based so the company does not
concentrate on their dress codes. Moreover there is no such printed contract in the
job description or in job agreement for safety or injury measures.

There is no technical training system for the normal worker level of the company. As
the turnover rate is very low, it will not be feasible to train worker level employees in
the Bangladesh Engineering & Re-Rolling Mills LTD. Mostly the employees are
experienced so they do not need that much of training. And for the new workforce
their training is based on their observation and help of senior employees. In other
words, there is no on job or with payment training in this company.

Present Position:

As it has been observed over and over again, due to excessive lack of gas &
electricity, the company could not concentrate their profit margin. Therefore they
have the capacity to manufacture 10,000 ton per month, but they are producing only
40% of it.

Moreover the Government take 15% tax for manufacturing finished goods and for
workshop 2.5%, thus the workshop now used for own machinery needs. On that
they can not contribute tax but in future they want to reopen the workshop. Other
than that they have faced some Airport customes related problems, but as the
culture of Bangladesh goes they had to bribe to get past the problems. Other than
these they are a good established company and their demand is somewhat growing
day by day.

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Issues:

Government issues:

Steel industry of Bangladesh is one of the most potential and promising sectors as this
industry is producing quality product to meet its demand all over the country. The
number of companies under this industry is growing every financial year. There are
many small companies which are dominating the market and holds 70% of the market
share. The history of steel industry started long before the Pakistan regime. During the
British period few companies were established and in the Pakistan period the industry
was stable because of availability of raw material. After Bangladesh was independent
no big investment was made by the government even now.

Because of growing number of competitors quality is ensured. Even though this sector
has great potential government is not playing the role which is creating problems in
the industry to grow. There is no set of rules or polices to ease the operation. Supply
of raw material is troubled as government is not paying attention to this industry.
Even raw material supplies are not of good quality as ship breaking industry operation
is corrupted. Government is not monitoring the inflow of supply and because of that
companies are forced to buy raw materials as charged by the suppliers.
There is no proposed infrastructure for this industry and government is not providing
any kind of economic aid or any direct assistance to this industry. The price of raw
material is not monitored which has led to the price of finished goods to be depended
on the price of raw materials. So the suppliers are playing almost monopolistic role in
the industry. Going forward, the government has an important role to play in offering
schemes and programs, (like carbon financing) to encourage cleaner production and
energy efficiency initiatives. The absence of appropriate incentives, environmental
management systems and regulations on energy are a weakness in the sector. A well-
documented energy and environmental policy with clear mention of incentives,
objectives, organizations, responsibilities, action plans and targets for reduction, date
lines, etc are necessary. However, while it may take time to implement these changes
on a national level re-rolling can begin to implement changes directly at the factory
level.

Develop culture of quality assurance and certification

Bangladesh has a lack of testing facilities, both for raw material (billets/scrap) and
finished goods. Quality assurance is needed at both these two stages of production. If
re-rolling mills knew the composition of the raw materials being charged in the
melting furnace, they could modify the material to get the desired properties in the
final output. Furthermore, there is a shortage of labs in which to test the quality and
composition of the rebar produced. In other countries many factories have their own
state of the art in-house test laboratories as part of their quality assurance management
strategy.

In Bangladesh, the situation continues as it has for years, since most construction
companies do not demand certification that rebar adhere to strict international or

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national quality standards. Thus the re-rolling industry is not under pressure to
improve, quite unlike the readymade garments industry. Further, most re-rolling mills
in Bangladesh are not ISO-certified. The above is crucial for attracting FDI and for
penetrating the export markets where international certification standards are needed.

Support investment in new technology

The industry needs incentives for process and technology improvements. China was
able to increase steel production from 67.2 million tons in 1990 to 349.4 million tons
in 2005, mainly due to government support. India, on the other hand, has fared
relatively poorly due to lack of government support. In Bangladesh as well, the
government can do more to address the need for centralized quality testing
laboratories, technical training institutes and wide scale awareness on the upcoming
potential of the sector. The government needs to design and implement a new policy
for the re-rolling mill industry with a view for long-term viability. With support from
the government, output and value addition of this sector could substantially increase.

Industry Issues:

Re-rolling mills are an important part of our economy as they supply the steel rebar
for our construction industry. According to IFC-SEDF, 2006 number of re-rolling
mills in Bangladesh was about 250 and the number is growing. It is a big sector which
employees more than 16,000 employees. Since the work environment is harsh number
of female employees is close to a thousand. Even though this industry fulfills the
internal needs Bangladesh is exporting 200-400 thousand tons every year. Average
capacity of Re-rolling mills is 600-800 tons per month. National demand for steel
rebar is almost two million tons, and Bangladesh imports very less amount of steel
bars. Bangladesh needs almost 2.6 million tons of raw materials and of that
Bangladesh has to import almost 1.4 million tons of raw materials.

With great capacity and possibility the industry is yet to overcome problems its
facing daily. Raw material for steel producing comes from the ship breaking industry
which is facing many legal problems in recent time. In addition, power shortage is
hampering the daily operation of the companies operating in the industry. Most of the
companies are operating half the working time as gas supply is irregular and load
shading has become a common phenomenon in our country. The industry does not
compare favorably with re-rolling mill industries in other countries. Some of the
issues facing the industry are as follows.

Develop New Sources of Raw Material

The re-rolling mills industry traditionally relied on ship breaking scrap for the
majority of its raw material requirements. Since the decline of the ship breaking
industry in Bangladesh (from 1.79 million tons per annum in 2001 down to 0.55
million ton per annum in 2005 and up again to 0.97 million ton per annum in 2006),
alternate sources have been developed. This industry depends largely on imported raw
material. The country needs to establish local production of quality raw material.

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Simultaneously, port facilities need to be improved to facilitate easier import of raw
materials. Large dependency on the imported raw material has made the production
uncertain.

Create own power supply

The biggest problem faced by the re-rolling mill sector in Bangladesh is the lack of
adequate power supply. The supply is erratic and unpredictable which leads to large
losses in repeatedly reheating the metal. In 2006 Bangladesh government announced
that re-rolling industry will receive power only at night, leading to further problems
for the industry. Since the whole country is facing a shortage of power, the re-rolling
industry has no hope for this problem being resolved in the near future and has to
either install captive generators or continue to suffer. In this regard an industry
friendly policy for small power plants with assured off take by the government would
largely solve the problem.

The problem with captive generation for re-rolling mills is the higher capacity that
one has to set up for generation to be able to accommodate the peaks. The solution is
to have larger generation shared amongst several industries to increase capacity
utilization or to have export to the grid and import from the grid with only nominal
wailing charges to be paid. There is no policy allowing for such arrangements. Given
the challenges the country faces, government interventions to engage with the private
sector to develop proposals that meet the needs of the industry while at the same time
safeguarding the nations interest could go a long way in resolving some of the issues.

Increase access to commercial or development finance

The re-rolling industry in Bangladesh has not shown much interest in obtaining bank
finance and the banks have also not been proactive in approaching this sector for
financing. Banks feel that re-rolling mills are not transparent enough and they
themselves lack the information and capability to assess re-rolling mills credibility
and risk-factor. This is a barrier to the modernization of the industry since re-rolling
mill owners do not upgrade their facilities. Furthermore, lack of access to finance is
also a constraint on possible export activities since re-rolling mills have no export-
credit.

Possible consolidation of steel industry

While mergers between major companies like Mittal Steel and Arcelor are occurring
elsewhere, the consolidation trend is still absent in the Bangladesh steel industry.
The re-rolling mill industry is fragmented and disaggregated. Most of the factories are
too small to take advantage of tandem line production to ensure quality and low cost
efficiency. The industry is disorganized and marked by destructive competition
among individuals who choose to compete with one another to offer the lowest price,
rather than cooperating for the collective good, or adopting progressive manufacturing
methods to improve quality and reach higher value larger markets.

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Consider the environmental impact

There is little to no monitoring of the environmental impact of re-rolling mills in

Bangladesh. While this may seem like a temporary advantage for re-rolling mill
owners who are left unaccountable for their actions, it is indeed a gross injustice and
will lead to grave consequences if left as is. It is imperative that steps are taken, either
by the government, civil society or re-rolling mills themselves, to monitor, evaluate
and work to alleviate the environmental footprint left by the activities of the re-rolling
mills. Sustainable, eco-friendly methods need to be adopted. It is only a matter of time
before the Government imposes laws regulating the environmentally damaging
activities of the industry. To prepare for this situation, re-rolling mills can be
proactive and begin modifying technology to reduce the emission of harmful gases.

Modernize and Automation

In our country a common problem is that production is not research-oriented, says

Professor Dr. Kamal Uddin, Director of Institute of Appropriate Technology, and
BUET. While in-house training and research may not be financially viable, the
government or private sector service providers, such as BUET, need to address this
gap in the market. In the future, for example, re-rolling mills will need to start
automating bar scanning facilities so that all production data can be input from a
centralized computer: bar codes created by production software can be automatically
loaded into the machine controller to eliminate manual entry of info by the operator
thus eliminating incorrect data entry and errors and minimizing the time it takes for
data entry and reducing operator key strokes and minimizing wastage of material.
This has been accomplished by state of the art re-rolling mills in the Middle East.

Company Issues:

Bangladesh Engineering and re-rolling Mills Ltd. has been contributing in the
industry growth for a very long time. After establishment in Tongi area in 1983 the
company has proved its ability and still providing finished good to its buyers. From
the very beginning of establishment Bangladesh Engineering & Re-Rolling Mills
LTD. is producing the same finished good and has established a number of fixed
customers beyond which they dont usually sell their products. Such policy has
limited their capability to produce new product and also hampered growth of the
company in this competitive market. The main reason why company selected few
buyers because they faced problems regarding payment with companies they supplied
finished goods. At this point Company feels they should grab few fixed customers so
that they can operate without facing any problems, in other words, company is not
willing to take any risk at this point. In the late nineties company started distributing
its work so that the whole process becomes easier and in the meantime company also
maintained strongly centralized decision making process. Employee who worked
under Mr. Khayaj Ahmed has no authority. Contractors are responsible to ensure the
process from collecting raw material and to finished good is done in time and by
maintaining the quality. They paid in the basis of ton produced. So in the process

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employees working for the contractor is not always concerned about the company
goal.

Bangladesh Engineering & Re-Rolling Mills LTD. is currently operating Tongi area
and machine that they operate was built by them. This company has great potential to
ensure their position in market. But due to shortage of power they have to operate in
the night time and even then the power supply is not constant. Since gas is the only
cheap way to operate those machineries close substitute is oil which is very expensive
and not considered as an option. Severe gas problem and load shading is the main
concern of the company right now.

Currently Bangladesh Engineering and re-rolling Mills Ltd has employed almost two
hundred employees. This company is currently leaded by Mr. Khayaj Ahmed and he
has the dream to grow the company but the problem is he himself can only start but
cannot continue the process. He is worried about the company future as there is no
one to follow him or back him up if something goes wrong with him. I am trying
really hard to develop the situation here but there is no one who can support me right
now and lead in the future he said with great deal of disappointment in his voice.
Employee in steel re-rolling mill works in a very harsh environment. The process
requires great deal of heat that can dehydrate an employee working more than 2
straight hours. So working condition is an important issue and the same scenario can
be seen in Bangladesh Engineering and re-rolling Mills Ltd. Since the process
requires having workers work under this condition there is no other alternative as
Bangladesh steel mills are not using any automated machines. At this point of
operation automating the system is not feasible as it requires huge amount of money.
To operate in this situation Bangladesh engineering and steel re-rolling mills has
divided working hour so that the harsh environment can do little harm to their
employees. Continues drinking water supply is there along with gigantic fans built
specially for such condition. Yet employees suffer from severe dehydration, headache
or vomiting tendency while working in this condition. The whole facility is tin shaded
and company provides housing facilities as well as daily meals.

Since the company has distributed its work into different parts and contractors are
responsible for carrying out the working process Bangladesh Engineering and re-
rolling Mills Ltd employees does not have any employee union.

Due to serious energy shortage the growth of the company is hanged. Feasible
alternative is yet to be found and Bangladesh Engineering and re-rolling Mills is
struggling along with hundreds other re-rolling mills in Bangladesh. Under this
situation Mr. Khayaj Ahmed Milon is puzzled about whether he should be focusing
on strategy to grow his company bigger fighting thousands of problems or simply shut
down this business and shift to his dream.to start a garments factory.

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