Chinese company to invest $2.3b in steel plant

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.

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