Nippon-McDonald, a joint venture between Japan’s Nippon Steel and Bangladesh’s McDonald Steel, was to start commercial production in September. But in late August, Nippon-McDonald’s Managing Director indicated to local media; the joint venture could miss its scheduled launch.
The venture was set up with an investment of BDT1bn ($11.77mn) to cater to the growing demand for steel plates in the country.
The second wave of COVID-19 infections badly affected the country’s economy causing delays in the start of several industrial projects.
The absence of foreign experts due to the pandemic and delays in utility supplies such as gas and power connections are some of the reasons impacting new projects in Bangladesh.
Nippon-McDonald’s plant is in Bangladesh’s new industrial complex, Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) in Mirsarai, Chattogram. The facility will produce galvanized and pre-fabricated steel sheets. The company plans to import raw material from China,
Japan and Europe and supply finished steel products to local pre-fabricators, including McDonald Steel.
The venture is Nippon Steel’s maiden investment in Bangladesh. Nippon Steel and McDonald Steel plan to invest BDT5bn in the joint venture in a phased manner. Nippon-McDonald expects annual sales of $20mn from the domestic market and once fully operational it also plans to export to South Asian countries, including the north-eastern states of India.
McDonald Steel is also building its own plant in the BSMSN industrial complex. The company produces pre-fabricated structural steel with steel imported from China, Japan, Luxembourg and India.