Abu Sayeem Chowdhury is the Director of Baizid Group and the heir to Abu Bakr Chowdhury, a very notable personality who is the Chairman of Baizid Group, and the Director to both ATN News and NRB Commercial Bank.
Born in Bangladesh, Sayeem was initially sent to Darjeeling, India, where he completed his schooling from Saint Paul’s School. Later, he returned to the country to join the Independent University of Bangladesh for his undergrads and took over his family business as the Deputy Managing Director.
The vibrant personality has added much to the company’s image as he continues to work as the DMD in Baizid Steel for the past eight years. Mr, Chowdhury is also the director to units such as CSS Corporation (Steel Plant), CSS Power (Captive Power Plant), ABC Associate (Trading), Jamuna Life Insurance and Alliance Deep Sea Fishing.
“Currently we are exporting to North Eastern India as geographically that is a good market for us. Obviously we want to enter the big league of exporters but with the resources, facilities and benefits they enjoy, it would be very hard for us to compete with them.”
Tell us about the journey of Baizid Steel. What has been the recipe for its success?
Starting its journey in 1986, Baizid Steel has benchmarked itself as one of the leading steel providers in Bangladesh. In the beginning, we started with a manual mill capacity of 16500 MT annually. Later in 2005, we transformed the factory into an auto rolling mill with a burgeoning capacity of producing 150,000 MT annually. Baizid Steel has always strived for excellence and extended relentless efforts to ensure progress. In 2009, QST 500+ was introduced with enhanced capacity of 2,20,000 MT. Today, we take pride in being the only company in Bangladesh to have received the Tempcore Certification from CRM Belgium. This certification along with best business practices has set us apart from our competitors. To sum it up, determination and perseverance to excel, dedication and hard work of potent work force coupled with constant gratitude towards the Almighty have helped us obtained whatever we achieved till date.
Tell us about the market trends observed by you in 2017 that added positive and/or negative growth in the steel industry in Bangladesh as well as in the world market.
Even though the steel industries around the world has been experiencing negative trends business wise, Bangladesh has maintained substantial growth in this sector. All the major steel mills have displayed significant pace of growth over the years. The government has taken on large infrastructure projects, which has helped the growth to be steady in the industry. To exemplify, in 2014 Bangladesh’s capacity of steel production was about 1 million tons, which tripled in 2016 and is expected to become 4.5-5 million tons by 2018.
The iron and steel industry is one of the core industries in Bangladesh. Being one of the prime consumers of scrap in Asia, Bangladesh stands to become the 4th largest scrap importer in Asia and the second in East Asia, after India. The mega infrastructural projects by the government account for nearly 40% of the total steel consumptions in the country.
What’re your suggestions about tariff barrier in the import of raw materials like billets? According to you, what sort of government policy support is needed to enhance the growth of this industry further?
In my opinion, the vat imposed on raw materials is high and mills that do not produce raw materials, and depends on imported billets suffer the most. At present, 20% regulatory duty and 15% VAT on import of billets have made billet importing unviable for some mills. However, the imposed tariff will contribute to the society and the government. At the same time, we must not forget that with an increase in billet manufacturing new jobs will be added in the market. Additionally, all the major steel mills are expanding their billet capacity to meet the country’s demand. In addition to that, government support is needed to ensure smooth and timely operation in the port. Since it’s an enormous industry, uninterrupted supply of gas and power must be assured from government end. Last but not least, government should incorporate policies to enable the bloom of real estate sectors of the country, which is still in the slump.
Is there any other resource or infrastructural limitations in the industry that is hampering its growth?
I have already voiced the importance of uninterrupted power and gas supply to run factories in a seamless manner. The tax and duties should be lowered for the industry to reduce the cost of goods so that the cost of construction is less and we also have a better chance to export our products. At the same time, the interest in the lending rates from financial institutions should be lowered, which in Bangladesh is very high when compared to our neighboring countries. We do have a problem of limited natural resources and dependence on importing raw materials and chemicals incurs huge cost that is not viable. Moreover, quality is often not strongly monitored which eventually hampers the growth of this industry.
How important is the inclusion of foreign direct investment for the development of this industry? Do you have any plan to go for the market outside with your existing product portfolio?
Make no mistake, foreign direct investment can make a huge difference in developing the industry. With the advent of FDI there will be more enhancement in production capacity and up- gradation of technologies in the steel industry. The technology and technical know-how will be shared which will ultimately increase the quality and quantity in the industry. The lower financial interest rates will also play a vital role here. Currently we are exporting to North Eastern India as geographically that is a good market for us. Obviously we want to enter the big league of exporters but with the resources, facilities and benefits they enjoy, it would be very hard for us to compete with them.
What is the condition of skilled manpower in the steel industry? Does it have adequate talents? How to mitigate the lacking, if any?
We all must cherish the growth we experienced in the last one-decade. But in a labor-intensive industry where technical expertise can give you an upper hand in revving up your production, I have no qualms in admitting that we do have a shortfall when it comes to engage skilled manpower. The condition is better now when compared to last decade. This eventually leads us to rely on experts coming in from our neighboring country. This trend, however, has been declining for some time as more engineers and skilled workforce are joining the industry. The number is still not adequate and this is why we need training centers for the workers and special courses on the steel industry in the engineering institutions. In this connection, industry-academia collaboration is a cry of the moment.
Any thoughts on the future expansion or innovation that you want to take up in your company?
Yes, we do have plans for expansion in the future. The country’s GDP is on a steady growth for the last couple of years, which we hope will continue till we enter the strata of middle-income country. As the country is developing so will the need for infrastructural developments, for which the steel industry is the backbone. The steel consumption per capita in Bangladesh was 20 kgs in 2010, which currently stands at 38 kgs. Nevertheless, when compared to the global average of 250 kgs, we still have a long way to go. We expect the demand of steel to double by 2022 and likewise we will increase our production capacity. Nothing will make us happier than to extend our contribution in the development of Bangladesh while ensuring utmost quality of the products we offer.