A TERM PAPER
ON
BSRM Steel
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Executive Summary
Supply Chain management (SCM) means managing the supply of inbound and outbound goods and services
in the most cost effective and time sensitive way. This can be done by designing a strategic route plan for the
quickest possible pick-up and delivery regimen, from the appropriate suppliers, for all points throughout the
assembly line, in order to achieve cost and time related efficiency levels. Then optimum operational
smoothness can be guaranteed giving a business an edge over competitors in marketing goods and services by
introducing goods and services quicker than established trend.
Bangladesh Steel Re-rolling Mills (BSRM) is one of the largest groups of companies operating in Bangladesh.
At BSRM, the consumer is at the centre of business. Here people operate in a high speed environment and
under tremendous pressure, so they need the strength of mind to make quick decisions, often basing them on
limited information. They also need to be open to innovative solutions that can improve their processes and
balance supply and demand while minimizing working capital.
BSRM supply chain is there to ensure uninterrupted supply of plan and materials to manufacturing, finished
goods to customers, indirect goods and services to all through integrated supply chain management of
logistics and sourcing at optimum cost while ensuring customer satisfaction.
Supply chain department of BSRM is the heart of all the business activities. From procurement of raw
materials to deliver the product to the ultimate consumers is under the supply chain functions. This report
basically focuses on the supply chain strategies practiced by BSRM. . There are an imitable supply chain
strategies and functions which will be role model for every local & multinational company.
The goal of a supply chain should be to maximize overall supply chain profitability. Supply chain profitability
is the difference between the revenue generated from the customer and the total cost incurred across all
stages of the supply chain. Supply chain decisions have a large impact on the success or failure of each firm
because they significantly influence both the revenue generated as well as the cost incurred. BSRM follows
world’s standard supply chain strategies where we can’t find any inaccuracy or inconsistency. But there are
some basic observations that can be taken into the consideration for further improvement.
Today’s shared knowledge and collaborative abilities of BSRM and is supply-chain members are the results of
transparency in information sharing. The clear visibility in material ordering, production planning, inventory
supply and management does lead to significant improvements in the overall performance of the supply chain
of BSRM
Background
Bangladesh Re-Rolling Mills (BSRM), after hearing this name people starts to visualize an organization which
has several characteristics. One of them is it sales of Steel products, besides this it has a very attractive
working environment and it is of the gigantic steel manufacturer in Bangladesh. This is the largest steel
product producer and manufacturer in Bangladesh after its close competitor. The BSRM Group of
Companies traces its origins and inception to a set of 4 small manual rolling mills in Nasirabad, Chittagong.
The mill produced reinforcing bars and structural sections.
As a student of Masters of Business Administration, it was required to submit a project paper to enrich our
knowledge level and to gain some practical experiences. We are proud to state that we have got the
opportunity to do our project paper of the course Business Marketing on BSRM. All of these helped us a lot
to learn the new concepts, to gain practical experiences and to know the corporate cultures.
The basic purpose of this experience is to expose the student to the real business situation and accustom his
or her with the practice of modern business world. This exposure is very rewarding for one self to see how
things move and to find the gap and as well as the similarities between theoretical knowledge and practical
operations. It is one of the giant steps which will help us in corporate career.
GROUP PROFILE
Background of the Group
The BSRM group was established in 1950 in steel business under the splendid initiates of five brothers
(African Origin) of a single family. Later on, the business concerns under of this group were run by the
families of late Mr. Akberali. Since its inception, the Group is involved only in the steel sector. The family
has been successfully running the group for the last 55 years and regarded as the best managed steel
units in the country. The group is also the largest contributor to the national exchequer under the steel
sector and also having largest set up in the country considering its integration in all areas of steel
industry.
History
Building the Nation since 1952
The BSRM Group of Companies traces its origins and inception to a set of 4 small manual rolling mills in
Nasirabad, Chittagong. The mill produced reinforcing bars and structural sections. The mill gradually
expanded, adopting new technology by setting up a cross country European mill in 1987 which included
a wire-rod mill. In 1996 the group added a captive billet making plant to ensure a steady supply of
quality billets for its rolling mills. A pilot cold rolling mill to manufacture ribbed high strength wires was
installed in 2006. Finally in 2008 a state-of-the-art DANIELI built rolling mill, incorporating technological
features such as:
Horizontal / Vertical housingless stands.
Multiple slit rolling for sizes 14 mm to 8 mm.
Stepless DC drives for accurate speed control, for tension free rolling.
A large “Quench and Temper” facility for up to 75 tons/hr. production of 500 Mpa strength bars.
The new rolling facility is one of the largest in the region, producing world quality bars conforming to all
major international standards.
Milestone & Achievement
Milestone - 1987
The four old manual mills were scrapped and an automatic billet-based rolling mill was installed with
continuous up gradation. The two highway bridges over the rivers Meghna and Gumti, the Chittagong
Airport, the KAFCO Fertilizer factory, most of the country’s large prestigious projects and many high-rise
buildings in Bangladesh were then built with BSRM bars.
Achievement - 1996
A captive billet-making plant was commissioned, under the name of Meghna Engineering Works. Costsaving Technology - 2006The first and only ribbed wire cold-rolling plant in the country started
operations using European technology to make 500 Mpa yield strength wire reinforcements in sizes
4.5mm, 5.7mm and 7.1mm, significantly reducing construction costs.
Industrial Analysis
Steel is a basic raw material for infrastructural development and multiple other uses. The demand for steel will
inevitably grow in line with the country’s economic and infrastructural development. Major buyers of mild
steel and re-rolled products include individuals, government and institutional buyers (developers). The
government’s infrastructure building activities is an important source of demand. The demand of MS rod in
Bangladesh has been increasing day by day and expected to increase at the rate by 8% due to the economic
and infrastructural development of the country, expansion of urbanization and booming construction of
shopping mall, market, real estate and other construction for industrial purposes. Construction of bridge as
well as public awareness and preference is increasing for quality building materials to ensuring safety and
better building construction; more particularly, in recent time to save from earthquake. Due to growing
consciousness among buyers and the generic nature of the products; new manufactures with efficient and
high quality technology will dominate over the existing players using old technology, because of their quality
and price advantage.
There are approximately 300 re-rolling mills in Bangladesh. Except some, most of the projects use crude
technology resulting in production of low quality steel bar. The domestic consumption of rods/ bars as a
whole is met through local production fully. This steel re-rolling sector continues to be a predominantly
fragmented one, with a few well-known established mills controlling about one third of the entire market and
many more small scale manual operators controls the rest. As the larger producers expanding their capabilities
and take advantage of economies of scale- smaller mills will find it harder to compete with the larger firms.
Under the above scenario, smaller mills will have have to face serious market competition in future.
Currently, they are questioned in terms of quality. As the larger mills consolidating their positions, the smaller
companies which are already high-cost players, will find it increasingly difficult to complete. Most steel rerolling mills in Bangladesh depend on scrap, leading to lower quality rods used in the market. Very few rerolling mills use billets as raw materials. The reasons for this is generally available regularly locally.
However, the price of scrap and billets during FY 2008 broke the record of the past. Leaders of the steel and
re-rolling industry urged the government to free the import of old scrap ships and vessels from the control of
certain vested groups to reduce the cost of scraps and building materials. 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.
Bangladesh Steel Re-rolling Mills BSRM
35%
Kabir Steel Re-rolling Mills KSRM
16%
Rahim Steel
10%
Ratanpur Steel Re-rolling Mills RSRM
12%
GPH Ispat
5%
Anwar Ispat
15%
Others
7%
Market Scenario of the Steel Industry
BSRM always has a solid reputation in the local steel market as one of the oldest establishments producing
the quality rods available in the country. This has enabled BSRM to command the premium prices and still
retain the largest market share in a highly fragmented industry with so many players. Following are the main
competitors of BSRMS:
7%
15%
35%
5%
Bangladesh Steel Re-rolling
Mills BSRM
Kabir Steel Re-rolling Mills
KSRM
Rahim Steel
Ratanpur Steel Re-rolling Mills
RSRM
GPH Ispat
12%
Anwar Ispat
10%
16%
Others
In the steel industry, BSRM is operating as a subsidiary of the market leader in Re-rolling industry,
experienced management team, State-Of-The-Art Plant, Quality products, sound infrastructural arrangement
and sound debt servicing history of the Group. The first of its kind in the country, BSRM was set up to
produce plain bars for the construction industry. Since 1952 it has started its journey and has always been in
the leading position in the market.
Attaining the 35% of the market share of steels re-rolling industry, BSRM is in the leading position. The
nearest competitors are KSRM, Rahim Steel, RSRM, GPH Ispat, and Anwar Ispat all consecutively holding
16%, 10%, 12%, 5%, and 15%. The rest 7% is of other companies.
Ratanpur Steels and Rerolling Mills (RSRM), is a Chittagong-based manufacturer. The RSRM was
launched as a manual low-grade rod producer in 1984. But the company, which uses scraps to produce billets,
overhauled its manufacturing plant late last year to produce 75-grade MS rod. Currently it holds 12% of the
market share in steel re-rolling industry.
Rahim steel mills co. (pvt.) Ltd., backed by the energy and experience of its entrepreneurs, has made a
name for it self in the field of steel making and is now one of the leading Quality steel manufacturing
company in Bangladesh. It holds 10% of the current market share in this industry at present.
Anwar Ispat, a sole concern of Anwar Group in Bangladesh, currently possess 15% of the market share in
steel re-rolling industry. Anwar Ispat Limited is amongst the leading re-rolling mills in the country. Use of
most modern fully automatic re-rolling mill and high quality imported billets assures that the produce meets
international quality parameters. Anwar Ispat specializes only in ‘Graded’ products, 40 Grade and 60 Grade
High Strength Deformed Bars (HSD-Bars), which are superior to general bars / rods.
Porter’s Five- Factor Theory
Financial Projection
The BSRM Group has been managing seven sister concerns, among which, six companies are at present in
operation. All the sister concerns of the Group are private limited companies with a net asset base of Tk.
4216.34 million as per un-audited balance sheet at the year 2007. Against the above net assets, the company
has non-current liabilities of Tk. 2377.41 million and resting an equity amount of Tk. 1934.94 million. The
above equity amount consists of share capital of Tk. 806.09 million and reserve of Tk. 1132.85 million. The
group has also three loosing concerns namely Karnafully Engineering Works Limited, BSRM re-cycling
industries Ltd. and BSRM Wires Limited. The above financial position represents 4.32 times leverage of the
group based on un-audited financial statements. The group has outstanding bank liability of Tk. 3,039 million
as term loan/project loan and Tk. 2,449 million as working capital loan from about 18 commercial bank and
financial institutions. All the group liabilities are unclassified status, as reported by the company.
Product Line and Price
SL#
Product Name
Product Size
Ex-Factory Chittagong
01
DEFORMED BARS Xtreme-500W
8 mm
TK.45,000
DEFORMED BARS Xtreme-500W
10 mm to 25 mm
TK.45,000
DEFORMED BARS Xtreme-500W
28 mm to 32 mm
TK.45,500
DEFORMED BARS (GR-400)
8 mm
TK 45,000
DEFORMED BARS (GR-400)
10 mm to 25 mm
TK 45,000
DEFORMED BARS (GR-400)
28 mm & 32 mm
TK.45,500
DEFORMED BARS (GR-300)
8 mm
TK. 44,000
DEFORMED BARS (GR-300)
10 mm to 20 mm
TK. 44,000
DEFORMED BARS (GR-75)
7 mm
TK.53,000
DEFORMED BARS (GR-75)
5.7 mm
TK. 55,000
DEFORMED BARS (GR-75)
4.5 mm
TK.55,000
M.S.ANGLE
38X38X 3, 4, 5 & 6 MM
TK.49,000
M.S.ANGLE
50X50X 4, 5& 6 MM
TK.49,000
M.S.ANGLE
63X63X 5& 6 MM
TK.49,000
M.S.ANGLE
75X75X 5 & 6 MM
TK.49,000
02
03
04
05
06
07
M.S.ANGLE
75X75X 8 & 9 MM
TK.49,000
M.S.ANGLE
90X90X 6 MM
TK.63,000
M.S.ANGLE
90X90X 8 MM
TK.63,000
M.S.ANGLE
100X100X 6 MM
TK.63,000
M.S.ANGLE
100X100X 8 MM
TK.63,000
M.S.ANGLE
100X100X 10 MM
TK.63,000
M.S.CHANNEL
100 X 50 X 5 MM
TK.51,500
M.S.CHANNEL
75 X 40 X 5 MM
TK.51,000
M.S.CHANNEL
125 X 65
TK.66,000
M.S.CHANNEL
150 X 75
TK.66,000
M.S.CHANNEL
200 X 75
TK.69,000
M.S.CHANNEL
250 X 82
TK.69,000
M.S.CHANNEL
300 X 90
TK.70,000
WIRE ROD(Commercial)
5.5, 6, 6.35 & 8 mm
TK.51,000
WIRE ROD(WR-8)
5.5,6 & 6.35 mm
TK.57,000
I. BEAM
150X150
TK.73,000
I. BEAM
100X100
TK.68,000
I. BEAM
150X75
TK.68,000
I. BEAM
198X99
TK.68,000
I. BEAM
200X100
TK.68,000
I. BEAM
200 X 200
TK.68,000
I. BEAM
248X124
TK.68,000
I. BEAM
298X149
TK.68,000
I. BEAM
300 X 150
TK.68,000
I. BEAM
450X200
TK.72,000
I. BEAM
400X200
TK.72,000
08
RAIL
60 Ib
TK. 68,000
09
SHAFT
40 mm
Tk. 48,000
SHAFT
46 mm
Tk. 48,000
SHAFT
52 mm
Tk. 48,000
Standard & Quality
Reinforcing steel production is a major industrial segment in every country of the world. It is generally
produced to national standards specification. As international trade has grown in volume and scope the
demand for a material specification across major national standards has grown. The Geneva based
International Standards Organization (ISO) under the guidance of the World Trade Organization (WTO)
played a pivotal role in the internationalization of material standards. Today the European Community
nations follow common material specifications for thousands of items and reinforcing steel is no exception.
Standardization of products to national and international specifications serves three useful purposes. First, it
simplifies the exchange of goods as buyers and sellers have a common specification. Further, legal
enforcement of contract specifications becomes easier and transparent. Most important the design profession
can prescribe material specification as per well-defined norms which are available in the area.
The international standard for reinforcing bar specification is ISO 6935. It has been adopted by the national
reinforcing steel standards of the entire European Community of nations as well as Russia and all the CIS
nation states. In Asia India, China and Japan along with the ASEAN nations has adopted the ISO based
standards for steel and many other material standards as well. Bangladesh adopted the standard in 2006. The
strongest motivation, for this move is to remain globally competitive, by making a product for both the
domestic and international market. It is worth mentioning that many of the nations adopting the ISO based
standard are in the high seismic category.
Chemistry of ASTM and ISO Standards
Chemical Composition
ASTM A 615
ISO 6935
Grade 60
Grade 500W
Carbon %
No limit
0.24% Max
Manganese %
No limit
1.65% Max
Silicon %
No limit
0.60% Max
Phosphorous%
0.06% Max.
0.06% Max
Sulphur %
No limit
0.06% Max
Carbon Eqv.
No limit
0.51% Max
ASTM and ISO compared
For a long time the US national standard ASTM 615 reinforcing steel specification was most widely used in
many parts of the world including Bangladesh. One of the reasons for the widespread use of ASTM 615
reinforcing steel was that it could be easily manufactured using simple and relatively inexpensive equipment
and technology.
ASTM 615 is an open chemistry specification, the mechanical properties are defined, the test procedures are
relatively straightforward but the chemical composition of the steel are not specified. The yield strength is
derived by increasing the carbon content of the steel, but this increases fragility as well. Practicing engineers
will recall the common site experience of ASTM 615 Grade 60 bars breaking while bending. The open
chemistry specification was a further reason for the widespread adoption of the ASTM 615 specification as
raw material (billets) from a variety of sources could be used to manufacture ASTM 615 Grade 60 bars. This
is reflected in the wide variation of the mechanical properties of the ASTM 615 Grade 60 steel. In our
country old demolished structures, such as anchor chains and propeller shafts of ships and railway rails are
used to make ASTM 615 Grade 60 reinforcement.
In stark contrast ISO 6935 standard has a highly restricted chemistry where the principal alloying elements
such as carbon, manganese, silicon which affects the mechanical properties of steel and several other trace
elements which have deleterious effects on steel property. The logical consequence of a restricted chemistry
reinforcing steel means the raw material [billet] has to be custom made for the purpose. The chemistry of
both the standards are compared below:
Both the ISO and ASTM standards steel have various strength categories. These enable structural engineers
to use steel as per design and service requirement. The strength categories ASTM and ISO standards are
compared below for easy reference. The ASTM standard follows the traditional US customary units for stress
which is pounds per square inch or psi. The ISO standard follows the System International or SI units for
stress which is indicated in Pascal. One million Pascal is abbreviated to MPa. For easy conversion 1 MPa =
145 psi.
As the demand for economy and cost control in the construction industry has raised worldwide the demand
for high strength steel reinforcement and high strength concrete. All buildings and structures in the
developed world and in the Middle East and in the ASEAN region are designed and built on Grade 500 steel
only. The reason is not only economy but better performance of the structure under conditions of
earthquakes and storms.
Economic consideration
Traditionally construction in Bangladesh has relied on Grade 400 strength steel for all types of construction.
The scenario changed rapidly with the introduction of Grade 500 steel last year by BSRM Steels Ltd. As the
use of Grade 500 steel reduces steel consumption by up to 15 per cent compared to Grade 400 steel the
introduction was an instant success. Many of the country's top developers and designers of high rise buildings
switched to Grade 500 for the inherent economy in the use of this grade of steel.
Competitive Advantage
The world is going toward progress. Establishments are gradually becoming large and strong. To keep pace
with this forward-movement and to make constructions cost-effective, bold, long-lasting and safer, next
generation rod is required.
This rod is called ‘Grade 500’ rod. This ‘Grade 500’ rod is heavily used in construction works all over the
world specially Europe, Malaysia, Thailand, Singapore, Middle-east and India. Now BSRM has brought that
similar kind of rod that is available in every district of Bangladesh.
To meet the demand for quality and standard rods in construction works, BSRM has established an
automatic rolling mill having production capacity of 3,75,000 ton per annum using European technology.
1. Cost-effective Design:
The minimal strength of Xtreme-500W is 500MPA (72,500PSI). It is 20.8% s5tronger than
60 Grade Bar. Eventually, this rod is required 15%-20% less than 60Grade Bar in
construction works.
2. Cost-effective Establishments:
Xtreme-500W can be welded easily. Hence to join column and found beam, rod is not
wasted. Usually splice of the bar have to be kept 20D during joining the column. But
welding requires only splice of 8D. It is calculated that welding saves rod of Tk.70-80.
3. Safer Design:
The flexibility and elasticity of Xtreme-500W is much greater than other rods due to limited
carbon as per international and BSTI standards. The elongation and elasticity of this rod is
greater than that of 114-rod and so it can be bent easily. Hence, during the fabrication in
construction works, there is no possibility of cracking or breaking. It is unique in protecting
earth-quake. It is capable to face shaking and shock loading. BSRM is the country’s only rod
manufacturer that use sophisticated European Technology to produce rod of international
standard.
4. Safer Establishments:
Xtreme-500W can be welded. It can protect sheering easily since the box of welded bar
becomes bold. Its shape can’t be changed during putting concrete or shake. So BSRM’s
Xtreme-500W is free from these weaknesses.
5. Financial Savings:
Unlike other rods, Xtreme-500W is free from artificial dust or mill scale and it creates firm
joint with concrete in addition to .25% savings in weight. There is no alternative to use
Xtreme-500W for making your dreamed home long-lasting and to reduce costs in
constructions or to protect yourself losses.
Exposures in Backward Linkage of Steel Re-Rolling
As mentioned earlier, the group is involved in the manufacturing of Billet, the basic raw materials of MS rod
production and also in scrap processing business. The billet manufacturing plant under the Meghna
Engineering Works(“MEW”) established in the year 1953 as a Kodali plant and was also producing cast iron
and pipes at that time. Eventually in 1994 this industry was closed and a new steel melting shop was
established there. The production capacity of MEW has increased to about 10,000 M. Ton per month from
5,000 M. Ton per month earlier, which was enough to meet the demand of BSRM. The increased capacity
was due to commissioning of the following two projects:
132/33 KV 41 MW sub station (the largest private sector sub station at Khulshi feed bulk power to different
projects of the group).
A 16 ton induction Furnace has been installed with the existing facility.
Again the company also planned to increase additional 3000 capacity per month by replacing its two 8 Ton
capacity furnace into 16 Ton furnace to meet the increased billet requirement of the group.
Though, BSRMS presently imports the basic raw materials, however, the group is also implementing another
billet manufacturing plant of 152,000 M. Ton capacity per annum by 2009, which will help for smooth
delivery of billet for the group. The Group management has decided to set up the above modern billet
manufacturing plant namely “ BSRM Iron and Steel Co. Ltd.” of 1,52,000 M. Ton capacity per annum with
an estimated project cost of Tk. 2560 million. Accordingly 20% cost of the furnace cost, percentage of
payments for Continuous Casting Machine, Ladle Refining Furnace, new 80 MVA Transformer etc. has been
already been remitted through the Islami Bank Bangladesh Limited. This plant is estimated to be established
by 2009.
Planning Process
Planning department in BSRM is responsible for the overall planning for the organization. Integration in the
planning process is the major activity for the success of the overall organizational flow. Planning process
starts from the field level of the market. Here the demand forecasting was made by the marketing
department. According to the yearly demand forecast send by the Depot’s the top planning team take the step
for Demand planning, which is the ground for production plan.
Business Development Branches
Demand Planning
Sales & Operational Planning (S&OP)
Production plan
Raw Material Planning
Indirect Material Planning
Commercial Planning
Final Production Planning
Detail Production Process
Production of high-tensile rebars and other deformed-type
long products for concrete reinforcement is a key issue for
countries where the construction of buildings and
infrastructures is growing. This type of product is even more
important for geographical areas with high seismic activity.
The ideal answer to these needs is the most advanced
technologies for low-cost production of high-tensile
commercial steel long products. The Danieli QTB,
processes, installed at the BSRM Steels Ltd rolling mills, is the most efficient available today to produce these
types of steel.
A fast growing building and infrastructure construction activity characterizes the economy of Bangladesh
which means increasing demand of high-tensile rebars and other deformed-type long products for the
concrete reinforcement.
The typical basic arrangement for such a plant foresees a rolling mill for production of high-tensile deformed
bars in straight bundles.
The new rolling mill, that started rolling its first bars in early March 2008, has introduced the latest long
product hot-rolling technologies for the first time in Banglagesh, making this plant the most advanced and
highly-productive rolling mill in the whole area.
The state-of-the-art bar mill, fed by a 75-tph pusher-type reheating furnace (supplied by BENDOTTI), is
basically composed of 18 SHS stands, QTB on-line rebar quenching & self-tempering system, automatic
cooling bed and finishing facilities for straight bars production.
Fig 3 - B.S.R.M. Rolling mill layout
The mill is designed to produce 8 to 38-mm-dia quenched and self tempered deformed bars for reinforced
concrete, at rates of up to 75-tph. The Danieli supply also included a complete water treatment plant for the
new rolling mill.
Electricals, automation system and process control for the rolling mill and auxiliary plants are from Danieli
Automation.
Plant description and highlights:
The mill is entirely made up of the latest generation
Danieli heavy-duty SHS housingless-type rolling stands,
arranged in H and V sequence for twist-free rolling at
roughing and intermediate/pre-finishing area.
the
The last portion of the finishing mill, arranged in H-H
sequence, is specifically designed for the slit rolling
process for production of smaller size deformed bars.
Fig 4 - SHS stands in operation at BSRM mill
The multi-strand slitting system, performed at the finishing mill, grants high output rates, enabling to reach
the full reheating furnace nominal capacity even with the smallest rebar size range.
This system is a combination of special roll pass design and designated
guide equipment to shape and longitudinally separate the incoming
rolled stock into two, three or four individual strands, then
simultaneously rolled down to the final rebar size at the finishing mill
stands.
The new mill slit rolls on 4, 3 and 2 strands, for production of 8-mm,
10-mm, 12 and 14-mm-dia rebars, respectively, at speeds of up to 12.5
meters per second.
Fig 5 - 4 strand slitting operation
A multi-strand QTB line is provided at finishing stand delivery side, for on-line rebar quenching and self
tempering.
This is a significant technological step-forward that will make possible production of on-line treated hightensile/wieldable rebar’s for the first time in Bangladesh.
The straight bars production outlet includes dividing shear
for multiple-length bars at cooling bed entry, 66-m-long
automatic walking beam type cooling bed with associated
feeding and delivery devices, bar cut-to-length system with
stationary cold shear, automatic bundling, weighing and
collecting facilities.
Fig 6 – Rebars on
cooling bed at BSRM mill
COMPANY ANALYSIS
Infrastructural Set-up
The plant is a pioneering project in the steel industry of Bangladesh with the latest available State-of-The-Art
Technology. The main infrastructures includes- Factory Building and Shed, Re-rolling Mills (furnace exit area,
rolling stand, QTB, cooling bed, binding and bundling area), Furnace, EQT Crane, Sub-station, Water
Treatment Plant, Laboratory (Universal Testing Machine, Wielding Machine etc), Workshop, Compressore,
Diesel Generator, Other Electrical installation, Administrative Office. It has own arrangement of electrical
installation for about 5 KM from the nearest 33 KV substation to ensure the continuous power supply. The
complete re-rolling mills with water treatment plant were supplied and commissioned by Danielli Group of
Italy, one of the three largest suppliers in the metal industry worldwide. And the furnace was supplied by
another Italian company namely “Bendotti”. It is producing Xtreme branded Thermo Mechanically Treated
(TMT) bars, a new generation bar with lower carbon content and greater wielding ability than the standard 60
grade deformed bars, which are currently available in the local market.
Procurement Strategy
The company will produce its raw materials mainly from International market as well as from its sister
concern “Meghna Engineering Works Limited”. It adopted a policy to maintain inventory of “Billet- the basic
raw materials”, both in stock and on pipe line, ofr at least equivalent to three months production
requirements, through alternative arrangement to reduce the single source dependency. Due to high price
volatility of Billet in the international market, the company always faces a market force to adjust with its
pricing of finished products. The existing high quality re-rolling mills are always facing severe competition in
price adjusting with the international market especially due to availability of low quality products in the local
market. On the above ground, the Group has decided to establish backward linkage industry to ensure large
quantity of billet supply for BSRM Steels Limited.
Distribution Strategy
The group has well established distribution channel all over the country, subsequently the same channel will
also be used for BSRM products. It has three types of distribution network as: Factory- Dealer- End Users,
Factory- Retailers- End Users, and Factory- End Users. Its country wide 80 dealers are the key channel to
reach to the consumers. In addition, the company’s own six sales depots at Dhaka, Comilla, Sylhet, Bogra,
Khulna and Moulavi Bazar works as the market stimulating agent and works as part of the channel. To cater
the need of the growing demand, the company has a plan to increase its dealership outlet and already 80
dealer arrangement has been made.
Marketing Strategy
The company is moving towards mass market with a comprehensive marketing plan under it dynamic
marketing team. It has also appointed renowned professional marketing company namely Unitrend Limited
to develop brand image. Its existing product line has already availed sound market image in view of its high
quality with consistence efficiency. To further upgrade the corporate image as well as brand image, it
reshaped its brand name as “BSRM Xtreme”- to substantiate its new quality as well as higher strength.
The entire marketing campaign entails complete 360 degree communications plan, embracing television, print
media and bill boards throughout the length and breadth of the country. The media effort if further
complemented by the Company’s own arrangement of extensive workshops at the upazila headquarters level
to educate customers on the benefit of using steels from reliable and proven source. It also arranges
professional seminar for the engineering community, conducted by the top teaching faculty of the country’s
leading engineering university, on the proper and safe use of its new generation products. The main feature of
Xtreme Bars is that it will save 15% in steel costs as compared to Grade 60 deformed bars.
Goodwill Trust
As BSRM is the first steel industry in Bangladesh and operating since 1950 it has a market goodwill which is
also another source of trust among the participants of the supply chain. BSRM follows transparent
information sharing systems thus provide greater empowerment to the partners which is enhancing factor of
trust.
As the level of trust between the supplier and the dealers are high it also shows that the interdependence
among the supply chain partners is also high. According to the above curve we can identify the relationship
by means of level of trust and interdependence we can say that the relationship between the parties are
relational contracting.
Technical Analysis:
In last one year BSRM share price is given below:
Here we looking form given chart share price is same behave from last year to this
year, as company fall share value December to May and June to September share
value randomly rise. At last 03 September, 2013 share price was open 74.2 Tk.
and close 75.6 Tk.
The analyst looks for patterns, whether trading is taking place in an upward flat.
In a downward market the analyst look for the trough which can be identified
only after reversal of the downward pattern after confirmation on of the reversal
the investor by.
Comparison between Two companies (BD Thai Aluminum vs. BSRM)
In BD Thai Aluminum share price of last month is up and BSRM still share price is
down.
CONCLUSION
The demand for steel is expected to continue to rise at a greater rate in the future in the line with the
country’s economical development and requirement for infrastructure, despite a bit slow down in recent
months in the real estate sector. However, BSRM continues to be a dominant player in the market and
market share remains above 35%.
The experience of preparing the project is a lifetime experience for us. Through this we got to learn the real
business scenario. We have learned how a company like BSRM manages its supply chain to achieve the
company goal.
.
Summary Observations and Recommendations
According to the above observations we like to enclose the following recommendation for the improvement:
Expansion of forward and backward linkage through long term planning.
As the new competitors are entering market with improved capacity BSRM should be concern about capacity
expansion.
Should minimize the dependency on imported raw material.
Maintain collaborative network for raw materials import thus use effectiveness in purchase strategy.
Arrange a utility management team as early as possible for continues operation.
Huge market exposure is required to penetrate the market to limiting the fixed cost burden.
Always keep eye on development of innovative technology.
References
Biswas, Dibakar. Assistant Manager, Business Development. BSRM.
Rahman,Anwar. Manager S&D. BSRM
Chopra & SMeindl.(2002) Supply Chain Management, 3rd Ed. New Delhi: Pearson Edu. inc.
Cravens. David. W & Piercy. Nigel F. (2003) Strategic Marketing, 7th Ed. Mcgraw Hill Higher Education
Dwyer.F,Robert & Tanner Jr. Jone F. (2002) Business Marketing, 2nd Ed. Mcgraw Hill Higher Education
Kotler, Philip. (2003) Marketing Management, 11th Ed. Pearson Edu. inc
Laaksonen.Toni, Pajunen. Kalle and others(1998) Co-evolution of trust and dependence in customer–
supplier relationships
Sheu.Jiuh-Biing & Hu.Tung-Lai (2009) Channel power, commitment and performance toward sustainable
channel relationship
Siu & Walsh (August 2008), Country Report: Bangladesh, UK, Economist Intelligence Unit.
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