NEWS report in a national English daily on Wednesday reported that Japan’s Kobe Steel Group has signed an agreement with a local firm to sneak into Bangladesh’s welding market. Kobe Steel is a global brand and aims at supplying its welding products to Chittagong-based firm TSI Marine to sell its products in the local market. We welcome the initiative of the Kobe Steel Group to open manufacturing of its products here in Bangladesh and hope that concerned authorities would extend all necessary help to set up the plants and go into business.
The domestic requirement of welding electrodes, a metal product which is used to fuse two other metal pieces together, is around 70 thousand tonnes a year and the demand is increasing with rapid urbanization, expansion of shipbuilding and other real sectors annually. Generally domestic steel industries meet the internal demands though import of welding materials for large infrastructure projects are at work. While Bangladesh is becoming big user of steel products, the Japanese firm’s entry into the market with its huge capacity is a timely move. It may bring pressure to some local firms but its presence will work at the end to make them competitive.
Our steel industry is predominantly based in the Port City of Chittagong and a major contributor to the national economy. Its domestic growth is mainly induced by the rapid expansion of construction industry in various sub-sectors.. As per the agreement, the Japanese firm will initially supply welding electrodes and focus on shipbuilding in the next step. Bangladesh’s current per capita finished steel consumption is at 26 kg compared to 57 kg for India in 2012. We know steel industry tracks the overall economic growth when the economy transform to higher growth. Its demand is derived from other building sectors including roads and bridges. More demand for steel is indicative of more economic activities for development. From this background we look at Kobe Steel’s debut in Bangladesh as an indicator of new transformation in our economy and hope that it will work as stimulus to other Japanese firms to relocate their plants here to make contributions as partner to our socio-economic development. The matter is that when the government expenditure runs high in building sector, the demand for steel also increases and we ask the government to raise expenditure on infrastructure to accelerate growth.
We know use of quality steel products in infrastructure such as in building factories or bridges could reduce damage and it is therefore highly recommended in earthquake prone zones. Use of prefabricated materials is therefore highly recommended in construction industry; which is highly tremor resistant to save lives and properties. We hope Kobe Steel will help our economy a lot.
