Mir Akhter wants to enter the steel industry

Eyeing an increase in its profit and reduction in the business costs, Mir Akhter Hossain Limited, one of the country's largest infrastructure construction companies, wants to have a steel factory mainly to meet its own demand.

It has a large portfolio of accomplished and ongoing construction projects that include roads, bridges, railways, airports, power plants, large hotel infrastructures, public offices, and commercial buildings.

The company has established cement, concrete products and ceramics factories for selling in the market after meeting its own needs. It also has businesses in the telecom, real estate, power and technologies sectors.

A senior official at the company – which began its construction business in the late 1960s as a partnership firm and became a private company in 1980 – said it spends a lot of money on purchases of rods for its construction projects every year.

So the authorities have decided to have their own steel plant to meet its needs, he added.

For this, a subsidiary company called Mir Steel Mills Limited will be formed and most of its shares will be owned by Mir Akhter Hossain Limited, said the official seeking anonymity.

He added that as a newcomer to the steel sector, the company would not have to go into business competition. Because most of the production will be bought by the construction company. The rest will be sold in the market.

Meanwhile, another official said that no new factory will be built for Mir Steel. Rather, a factory will be bought from another company. However, the price at which a factory will be bought will be announced once it is finalised, he said.

According to the industry insider, the steel industry in Bangladesh is worth Tk55,000 crore. There are about 40 active manufacturers with a combined capacity to produce nine million tonnes of steel a year. Of them, Abul Khair Steel, GPH Steel, BSRM and KSRM meet more than half of the annual demand.

Besides, BSRM, KSRM and Abul Khair Steel are investing more in this sector as demand in the country increases.

Earlier, Mir Akhter Hossain Limited was allowed to issue bonds worth Tk250 crore for working capital and clearing high-cost liability.

The company raised Tk125 crore from the capital market in 2021 through IPO (initial public offering) under the book-building method for business expansion. For this, the company offloaded its shares at Tk60 each.

Despite the financial slowdown during the coronavirus pandemic, the company paid shareholders a 12.50% cash dividend for fiscal 2020-21 when the profit stood at Tk45.94 crore.

Meanwhile, the company's business grew 4.5% in the first six months of the current fiscal year, but its profit fell. The profit dropped by 13% to Tk18.69 crore mainly due to an increase in construction material prices.

Mir Akhter shares closed 0.98% higher at Tk62.10 on the Dhaka Stock Exchange (DSE) on Sunday. The highest share price of the company in the last year was Tk105.

Sponsors and directors hold 48.58% of shares of the company with a paid-up capital of Tk120.27 crore. In addition, 4.56% of shares are owned by institutional investors and 46.86% by general investors.