GPH Ispat on Monday began commercial production at its new plant, which was built using quantum technology – the first in Asia and the second in the world – at a cost of Tk2,500 crore.
The annual production capacity of the plant is 8,40,000 tonnes of billet and 6,40,000 tonnes of rod and medium section products, such as BIM steel, angle, channel, flat bar, etc.
With this, the annual production capacity of the company will be 10,08,000 tonnes of billet and 7,60,000 tonnes of rod and medium section products.
The expanded production at the plant is expected to increase GPH's market share in the steel industry to around 10% from the existing 3-4%.
The company said in an official disclosure on the Dhaka Stock Exchange (DSE) website that it is not possible to avail on-site support of technicians from Primetal Technologies Austria GmbH, the main technology supplier of the plant, due to the coronavirus pandemic.
This has caused the company to face barriers during the completion and commissioning of its products.
According to local technicians, however, the plant and products are fit to start commercial production of certain items, especially MS rod and MS billet.
In September last year, the new plant went into trial production followed by sales of goods.
After the disclosure was published, the company's share prices increased by 2.47% to Tk37.4 each at the end of Monday's trading session on the DSE.
GPH Ispat posted an impressive growth of 218% in revenue during the third quarter of this fiscal year amid the ongoing pandemic, thanks to billet exports.
During the third quarter of this fiscal year, its revenue stood at Tk776.05 crore, which was Tk244.2 crore in the same period of the previous fiscal year.
In this period, its net profit jumped by 859% to Tk45.2 crore compared to the same period last year while earnings per share stood at Tk1.14.
In the first nine months of this fiscal year, the company posted revenue growth of 136% to Tk1,900 crore while its net profit grew by 209% to Tk114.85 crore compared to the same period last year.
Besides, its earnings per share stood at Tk2.89.
The company explained that the new products from the trial production of the expanded plant contributed to the significant increase in market shares and changes in financial outputs.
But sources at the company said business could not reach the expected level due to the pandemic. The company is also facing a shortage of raw materials and their price hikes.
It has started exporting billet (raw material for steel), which has created the opportunity to grab a new market.
In October last year, it started exporting billets to China, which was the first of such exports in the country's history.
Sources said the company exported 1 lakh tonnes of billet to China during the third quarter of this fiscal year and earned over Tk350 crore that helped it post the significant growth.
But in the export market, the company is facing several problems, such as a lack of logistic support and high production costs.
If the government supports the potential sector – as it does for the garment industry – it could bring in a handsome amount of foreign currency, said sources.