Project Report

On
Company Analysis and Improvement Guideline of

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 Project Report
On
Company Analysis and Improvement Guideline of
Bangladesh Steel Re-Rolling Mills Limited

Department of Management
University of Chittagong

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 Project Report
On
Company Analysis and Improvement Guideline of
Bangladesh Steel Re-Rolling Mills Limited

Submitted to:
Dr. Zahurul Alam
Professor
Department of Management
University of Chittagong

Submitted by:
Abid Hossain
ID No: 13302161
Session: 2016-2017
Department of Management
University of Chittagong

Date of Submission: 20h May, 2020

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 Letter of Submission

20th May, 2020

Dr. Zahurul Alam

Professor
Department of Management
University of Chittagong.

Subject: Submission of Project Report “Company Analysis and Improvement Guideline of

Bangladesh Steel Re-Rolling Mills Limited”

Dear Sir,
It is a great pleasure for me to submit the project report, in accordance to your advice, on
“Company Analysis and Improvement Guideline of Bangladesh Steel Re-Rolling Mills
Limited” as a part of my MBA Program. This report will help to find out related factors and I
have tried to focus on the relevant information which would cover the objectives of the report.
But no doubt, without the sincere co-operation and proper guidance of you, it was not possible
for me to prepare this report.

I hope you will assess my report considering the limitations and mistakes of the study. Your kind
advice will encourage me to do further research in future.

Thank you.

Sincerely yours

Abid Hossain
ID: 1330161
MBA (SCM)
Session: 2016-2017
Department of Management
University of Chittagong

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 Acknowledgement

The project opportunity I had with “Bangladesh Steel Re-Rolling Mills Limited” was a great
chance for learning and professional development. Therefore, I consider myself as a very lucky
individual as I was provided with an opportunity to be a part of it.

I would like to express the gratefulness from the core of my heart to my supervisor honorable,
Dr. Zahurul Alam, Professor, Department of Management, University of Chittagong for
providing me detailed feedback and advice on this report. He always gave me his valuable
suggestions in making this study.
I perceive this opportunity as a big milestone in my career development. I will strive to use gained
skills and knowledge in the best possible way and I will continue to work on their improvement
in order to attain desired career objectives.

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 Supervisor’s Declaration

This is to certify that the project report entitled “Company Analysis and Improvement
Guideline of “Bangladesh Steel Re-Rolling Mills Limited” submitted as a partial fulfillment
for the award of the degree, MBA has been carried out by the student, Abid Hossain bearing ID:
13302161 under my guidance & supervision.

Supervisor

--------------------------------------

Dr. Zahurul Alam

Professor
Department of Management,
University of Chittagong.

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 Executive Summery

As part of my MBA program, I have completed my project on Bangladesh Steel Re-Rolling

Mills. During my project period I have gained valuable knowledge. So based on my learning and
experience I have completed my project report on “Company Analysis and Improvement
Guideline of “Bangladesh Steel Re-Rolling Mills”
In the first chapter, Introduction described the background of the study, the main objectives of
the report and the methodology of the report as well as the sources from where the data are
collected.
The second chapter represents the overall company profile. In this profile contains overview of
the organization, mission and vision of the organization and the products of the organization.
Third chapter describes industry analysis which includes the overview of Bangladesh steel
industry and Porter’s Five forces analysis.
Fourth chapter discusses the economic analysis of Bangladesh which includes analysis of various
indicators.
Fifth chapter includes External environment analysis using PESTLE.
In chapter Sixth, I have discussed the company or internal environment analysis.
In the Seventh chapter I tried to find the relevant problems of the company.
In the Eight chapter, I discusse about the solutions of the problems using SWOT Matrix.
Finally, in the ninth chapter I have given some recommendation based on SWOT matrix
.

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 Table of Content

Chapter Content Page Number

1.0 Introduction
1.1 About World Steel Industry 11
1.2 Rational of the study 12
1.3 Objectives of the study 12
1.4 Research Method 13
1.5 Limitations of the study 13
2.0 Bangladesh Steel Re-rolling Mills Ltd.
2.1 Company overview 16
2.2 BSRM Land Marks 20
2.3 BSRM Portfolio 22
2.4 Management Committee 25
2.5 Key Management 25
2.7 Organogram 26
3.0 Industry Analysis
3.1 Overview of Industry 28
3.2 Major Types of Steel 28
3.3 Bangladesh Steel Industry is self-reliant 29
3.4 Major Players in the market 30
3.5 Market Share 31
3.6 Porter’s Five Forces Model 31
4.0 Economic Analysis of Bangladesh
4.1 Economy of Bangladesh 34
4.2 Steel Industry Contribution to BD Economy 38
5.0 External Environment Analysis
5.1 PESTLE Analysis 43
6.0 Internal Environment Analysis
6.1 Product Life Cycle 46
6.2 Value Chain 47
6.3 BCG Matrix Chart 51
6.4 Balance Scorecard 52
6.5 VRIO analysis 53
6.6 Ratio Analysis 54
7.0 Problem Identification
7.1 Opportunities & Threats 65
7.2 Strength & Weakness 67
7.3 Identifications of Problems based on Analysis 68
8.0 Solution of the Problems
8.1 SWOT Matrix 70

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9.0 Recommendations & Conclusion
9.1 Recommendations 73
9.2 Conclusion 73
References 74

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 Part-1
Project Introduction

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1.1 ABOUT WORLD STEEL INDUSTRY

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.
The global steel industry has been going through major changes since 1970.China has emerged
as a major producer and consumer, as India to a lesser extent. Consolidation has been rapid in
Europe.

Production of crude steel has risen at an astounding rate, reaching 1,689 MN tones by 2017.During
the 20th century, the consumption of steel increased at an average annual rate of 3.3%. In 1900,
the United States was producing 37% of the world’s steel, but with post war industrial
development in Asia and centralized investment by China, by 2017 china alone accounted for
about 50% of total global steel market.

According to World Steel Organization, Asia produced 946.8 Mt of crude steel, an increase of
5.5% over the first nine months of 2017. The EU produced 128.0 Mt of crude steel in the first
nine months of 2018, up by 1.3% compared to the same period in 2017.

North America’s crude steel production in the first nine months of 2018 was 89.7 Mt, an increase
of 3.4% compared to the first nine months of 2017. The C.I.S. produced 76.2 Mt of crude steel in
the first nine months of 2018, up by 1.8% compared to the same period in 2017. (Habib N. 2018)

WORLD STEEL PRODUCTION

2000 1808
1669 1730
1800 1650 1620 1627
1538 1560
1600 1433
1400
Million tones

1200
1000
800
600
400
200
0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Axis Title

(World Steel Association- 2019)

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 TOP 10 STEEL PRODUCING COUNTRIES
Million Tones

ITALY 24.5
BRAZIL 34.9
TURKEY 37.3
GERMANY 42.4
RUSSIA 71.7
SOUTH KOREA 72.5
UNITED STATES 86.6
JAPAN 104.3
INDIA 106.5
CHINA 928.3
0 100 200 300 400 500 600 700 800 900 1000

(World Steel Association- 2019)

1.2 RATIONAL OF THE STUDY

This report is the presentation of “Strategic Audit” program as a part of academic requirement of
the M.B.A. program, Department of Management Studies, University of Chittagong. The part of
this report is focused on External and Internal environment analysis of Bangladesh Steel Re-
Rolling Mills Ltd

1.3 OBJECTIVE OF THE STUDY

The main purpose of this project is to acquire knowledge about the internal and external
environment of a company and applied the theoretical knowledge related to the Strategic Audit.
The areas on which we will gave emphasis are:

 To know the overview of steel industry in Bangladesh.

 To know the overview of Bangladesh Steel Re-Rolling Mills Ltd and their position in the
industry.
 To recognize the external environment of BSRM Ltd.
 To recognize the internal environment of BSRM Ltd.

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1.4 RESEARCH METHODOLOGY
In order to complete this report, I proceeded through a work plan. I physically visited factory plant
and interviewed and discussed with executive of different level. The information and data for this
report have been collected from both the primary and secondary sources. Details are giver below:

1.4.1 Primary data:

Relevant primary data for this report have been collected through direct visit and discussion with
concerned personnel.

 Direct conversations with concerned executive

 Information shared over phone call

1.4.2 Secondary data:

Secondary data have been collected from the following sources:

 Company information from company website.

 Audit file (2017 -2018)
 Audit File (2016-2107)
 Audit File (2018-2019)
 Internet
 Articles
 Books
 Previous report

1.4.3 Data process:

Finally, the collected data are classified, tabulated, interpreted, analyzed and presented in the form
of research report thereafter

1.5 LIMITATIONS OF THE STUDY

I tried my best to collect the maximum information from Bangladesh Steel Re-Rolling Mills Ltd.
But this report is not free from short faults. The study has been conducted subject to certain
constraints:

 For the company strategy, the authority not providing confidential financial data.

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  The rate of success of my study may be limited, as I may have failed to collect proper
information due to lack of our experience.
 It is very difficult to collect data about their departmental activities in separately.
I, therefore, hope that the study will be evaluated subject to the recognition of the above-
mentioned shortcomings.

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 Part-2
Company Profile

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2.1 COMPANY’S OVERVIEW

Bangladesh Steel Re-Rolling Mills Limited (BSRM LTD) is the oldest Steel re-rolling mill in
Bangladesh. It started its journey in 1952 with four manual rolling mills. It was the first steel mill
in Bangladesh. Now Bangladesh Steel Re-Rolling Mills Limited (BSRM LTD) is the biggest
merchant steel re-rolling mill in Bangladesh. This mill is capable of producing high quality
Reinforcing Steel and steel sections such as Channel, Angle, square bar etc. BSRM LTD has
increased its capacity from 120,000 M. Ton to 540,000 M. Ton and started its commercial
operation from December 09, 2015. BSRM LTD has another unit called “Steel Melting Works
(SMW)” which is producing Billets having capacity of 150,000 M. Ton per annum. BSRM LTD
has significant investment in the equity of BSRM Steels Limited and BSRM Steel Mills Limited.
Presently, Bangladesh Steel Re-Rolling Mills Limited is holding 31.19% shares of BSRM Steels
Limited and 44.97% shares of BSRM Steel Mills Limited. At present BSRMLTD has two
subsidiary Companies - BSRM Steel Mills Limited and BSRM (Hong Kong) Limited.

Over the years BSRM steel products has been chosen solely for building major National
landmarks and infrastructures. To name a few, the Hatirjheel Project, Zillur Rahman Flyover,
Mayor Hanif Flyover and Shah Amanat Bridge were made with BSRM Xtreme. BSRM Xtreme
is a product that was introduced when there was no graded steel. It was major change in the steel
industry. The core driver was the belief in evolution in steel products, which resulted in bringing
the first EMF tested rod, the first steel brand that passed 5 million cyclic loading Fatigue testing
in the U.K. and conformed to 10 global standards. With the largest steel producing factory in the
country and employing the best technology from Europe, the company maintains volume with
uncompromising quality. BSRM is dedicated to providing the best solution for the construction
industry. The first ever 50mm rod was specially designed and rolled for the deep pilling
requirements of Padma Bridge. Its recently introduced brands are also designed to meet special
needs for the construction industry

2.1.1 Company profile

Name of the company: Bangladesh Steel Re-Rolling Mills Ltd.

Numbers of the directors: Five (5) Directors.
Management Pattern: Managing Directorial Pattern
Authorized Capital of The Company: . Fifteen (15) Crore taka
Present Capital 700000 MT

Paid up Capital 3,417.75 MLN

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 Location: (Head Office) Mr. Tapan Sengupta (GM)
Ali Mansion Sadarghat Road,
P.O. Box No. 337,
Chittagong-4000, Bangladesh
Phones: 88-031-613282, 637758
Fax: 88-031-610101
E-mail: bsrm@globalctg.netm

Location: (Factory) Mr. Sankar Roy (AGM)

147/148/149 Baizid Bostami Road,
Nasirabad Industrial Area,
Chittagong-4000, Bangladesh
Phone: 88-031-683053, 683164.
E-mail: bsrm@spnetctg.com
Dhaka Office : Mr. Kazi Anwar Ahmed (GM)
Mahbub Castle, 35,
Purana Paltan Line (2nd Floor),
Inner Circular Road (VIP Road),
Dhaka-1000, Bangladesh,
Phones: 88-02-8313135,408587
Fax: 88-02-8312905.
E-mail: bsrm@bangla.net
Form Of The Organization Private Ltd. Company

Operations The type of operation of the company is

production oriented
Establishment Date Formally, the Company is established in
1960.
Beginning of Production Beginning of Production

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2.1.2 Concern Group
The group has a good forward and backward integration of different steels business under its
different sister concerns. A brief summary of group concerns is delineated below:

NAME PRODUCT PRODUCTION CAPACITY

(per day)
BSRM Steels Limited Rebar 2500 MT approximately

Bangladesh Steel Re- Rebar, Channel, Flat Bars 2200-2300 MT approximately

Rolling Mills Limited Angle
BSRM Steels Mills Billets 3300 MT approximately
Limited (SML)
BSRM Steel Melting Billets 550 MT approximately
Work (SMW)
BSRM Iron & Steel Billets 780 MT approximately
Company Limited
(BISCO)

Others:
 BSRM Wires Limited
 BSRM Recycling Industries Limited
 BSRM Logistics Limited
 BSRM Ispat Limited
 BSRM Real Estates Limited
 Bangladesh Steels Limited
 Karnafully Engineering Works Limited
 Chittagong Power Company Limited
 H. Akberali& Company Limited

2.1.3 Company mission

 To Produce High Quality Steel Products.
 To Reduce the Cost of Production.
 To Optimize Production Capacity.
 To Ensure Maximum Satisfaction of the Customer.
 To Recruit and Develop Workforce.
 To Ensure Adequate Corporate Governance & Compliance

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2.1.4 Company vision

 Maintain leadership position in the steel industry by producing the best quality steel products,
continuously enhancing customer satisfaction and becoming a reliable business partner of our
customers and suppliers.
 Be an employer of choice, with focus on nurturing talent and developing future leaders of the
organization.
 Protect the interest of our shareholders through sustainable growth and value creation.
 Preserve the trust of all our stakeholders by adopting ethical business practices.
 Support the society through Corporate Social Responsibility initiatives.

2.1.5 Company values:

Sustainable Growth: Consistent improvement in the quality of products and services, efficiency
of processes and profitability of business; continuously anticipating and responding to the
changing business and environmental needs using innovation sharing knowledge and experience
within the organization.

Quality: Create products and services valued by our customers; constantly improving our
processes through innovation and adopting best practices; reducing wastage; minimizing costs;
investing in systems & technology and developing our people to build a highly capable workforce.

Reliability: Be the preferred business partner of our customers and suppliers by offering quality
products; providing our best and timely service before, during and after the business transactions
and honoring all our commitments despite challenges.

Trust: Preserve the faith and goodwill of all our stakeholders – Customers, shareholders,
suppliers, employees, regulatory bodies and society by-adopting ethical and transparent business
practices, being fair and honest in all our dealings and building robust governance and risk
management processes.

Leadership: Be a role model, setting benchmarks through our products, processes and people;
constantly moving ahead of competition by differentiating our products, innovating our processes,
increasing our market share and nurturing talent to develop leaders within the organization.

Social Responsibility: Acknowledge and fulfill our obligations towards the society by
undertaking initiatives for the general uplifting of the society, building capability and making
facilities available to the underprivileged.

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Customer Satisfaction: Delight our external and internal customers at every stage of our
interaction with them by truly understanding their needs, offering them our best products and
services, treating them with respect and actively seeking and acting on their feedback.

2.1.6 Code of conduct:

BSRM always adopts best, ethical and transparent business practices to be fair and honest in all
our dealings. They always acknowledge and fulfill their obligations towards the Society and offer
their best services to their customers and treat them with respect and honor.

2.1.7 Overall Strategic Objective

 To Produce High Quality Steel Products.

 To Reduce the Cost of Production.
 To Optimize Production Capacity.
 To Ensure Maximum Satisfaction of the Customer.
 To Recruit and Develop Workforce.
 To Ensure Adequate Corporate Governance & Compliance.

2.3 BSRM LAND MARKS:

BSRM has left its marks in many edifices in the country which could be described as
Landmark. This is the infrastructure of an emerging nation, Bridges, Flyovers, Airports,
Power Plants, and Fertilizer Factories. We are proud they have BSRM inside them.

The structures we show on this section span a period of nearly 40 years. It is a snap shot
of the country emerging from the ravages of the liberation war and traces the development
of the young nation.

Hathir Jheel Project

Special Works Organization (SWO),

Bangladesh Army, LGED & Dhaka WASA
jointly constructed the 8.8Km express road
along with service road & bridges in Hatirjheel
and Begunbari Khal, Dhaka. This mega project
has BSRM Xtreme inside.

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Saidabad Water Treatment Plant-
Phase 2

The leading Danish construction firm MT

Hojgaard constructed this plant in Saidabad,
Dhaka to supply 225 billion liters of
drinkable water to Dhaka city inhabitants.
This project is entirely built with BSRM re-
bar.

Mayor Mohammad Hanif Flyover

The 11 KM long flyover in Jatrabari, Dhaka of
Orion Group under the Public Private Partnership
with the Govt. of Bangladesh was constructed by
Simplex Infrastructure Ltd., India. BSRM is the
proud construction partner of this landmark project

Shah Amanat Bridge

The 1KM long country’s first cable-stayed

bridge over the Karnaphuli river, Chittagong
connects the port city to the tourist resort of
Cox’s Bazar. This project has BSRM Xtreme
inside

On Going Big Project

Padma Bridge Rooppur Nuclear Power Plant

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2.4 BSRM PORTFOLIO:

BSRM is country’s first producer of 500 MPa yield strength re-bar, branded and marketed as
Xtreme 500W, proving BSRM’s quest for continuous innovation as nation building partner.
Beside re-bar production, BSRM rolls and markets sectional steels such as angles and channels
and ribbed wire which are manufactured in separate plants of BSRM. The bars, specially Xtreme
500 W and sectional products ranging in various sizes conforming to ISO 6935-2:2015 and ISO
630-3:2012(E) respectively which are the lawful standard of the country. BSRM’s steel products
are inside Buildings, Bridges, and National Infrastructures all of which are made to internationally
accepted construction codes. The codes in turn specify engineering materials conforming to
various global standards.

 BSRM Xtreme
 BSRM Maxima
 BSRM Ultima
 BSRM Xtrong
 BSRM Centura

BSRM Xtreme:
Xtreme is a high strength reinforcing steel for general purpose construction of low and medium
rise commercial and residential buildings and bridges. It is the steel of choice among home
builders. It is used in the design and construction of Ordinary and Intermediate moment frames
of reinforce concrete (RC) Buildings, whenever high strength for economyand high ductility for
safety is required. The most common sizes for home builders are 8mm, 10mm, 12mm, 16mm,
and 20mm. BSRM created history by becoming the only steel producer, in the Indian sub-
continent; to roll 50mm rebar. The 50mm Bar was used in the pile foundation of the Padma
Bridge. BSRM’s Xtreme500W conforms to BS 4449 Grade 500 and BDS ISO 6935-2 Grade
500W. It is the best-selling reinforcing product of BSRM since 2008.

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BSRM Maxima:

BSRM Maxima is exactly the material for construction of projects which needs extra strength
combined with an extra dose of safety. It has Yield strength exceeding 80, 000 psi [550MPa]
combined with Tensile strength exceeding 105, 000 psi [725MPa]. It has fantastic elongation
exceeding 16%, in all sizes. BSRM Maxima is the perfect material which requires Strength and
Safety in the same breath. Nuclear power stations and large river crossing Bridges are perfect
examples where BSRM Maxima can be used. BSRM Maxima has undergone successful
production in BSRM Steels Ltd. and extensive testing in Bangladesh University Engineering
Technology (BUET) Dept. of Civil Engineering.

BSRM Ultima:

In a landmark innovation BSRM brings forth BSRM ULTIMA the reinforcing steel with the
unique ‘strain hardening’ property for the first time in the country. BSRM ULTIMA conforms to
the U.S. national reinforcing steel standard ASTM A-706 Grade 60 and ISO 6935-2 Grade 420
and recognized by the American Concrete Institute (ACI) of 2014 and the Bangladesh National
Building Code (BNBC) of 2015. Strain hardening steel requires additional stress beyond its yield
strength to produce additional plastic deformation and the steel becomes stronger and more
difficult to break. All vital installations anywhere in the country like hospitals, schools, airports,
railway stations and bridges cannot be allowed to fail in an earthquake. They have to be reinforced
with ‘strain hardening’ steel and designed with special moments frames as per the guidelines of
the Bangladesh National Building Code (BNBC).

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BSRM Xtrong:

Xtrong is a high strength structural steel conforming to ASTM 572 Grade 50 and ISO 630 Grade
345 Channels and Angles section rolled out of this high strength steel provides an economical
alternative to steel fabricated structures compared to traditional ASTM A-36 steel. Structures
made out of Xtrong or Grade 50 steel requires 18% to 25 % less steel compared to Grade 36 steel.
BSRM makes Angles, conforming to Grade 50 in the following sizes.

BSRM Centura:
Corrosion induced failures causes severe distress to concrete structures is most common in any
chemically aggressive environments. Fusion Bonded Epoxy (FBE) Coating is able to provide
protection against corrosion for the design life of the structures. Technology introduced in India
in 1990 there are several thousand structures across India, particularly in the coastal areas. This
proves the efficacy of the FBE Coating to prevent corrosion in concrete structures.

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2.5 MANAGEMENT COMMITTEE

 Tapan Sengupta, Deputy Managing Director

 Kazi Anwar Ahmed, General Manager Corporate Affairs & Dhaka Corporate Office
 Shekhar Ranjan Kar FCA, General Manager Finance & Accounts and Company
Secretary
 Sunil Kumar Das, General Manager India Office
 Jamil Ahmed, General Manager Human Resources
 Mohammad Imtiaz Uddin Chowdhury, Deputy General Manager Sales & Marketing
 Sanjoy Kumar Ghosh, Senior Manager Supply Chain Management

2.6 KEY MANAGEMENT

 Tapan Sengupta, Deputy Managing Director

 Hasan Zafar Chowdhury, Chief Strategic Project Officer
 Kazi Anwar Ahmed, General Manager Corporate Affairs & Dhaka Corporate Office
 Shekhar Ranjan Kar FCA, General Manager Finance & Accounts and Company
Secretary
 Sunil Kumar Das, General Manager India Office
 Md. Azizul Haque, General Manager Manufacturing
 Jamil Ahmed, General Manager Human Resources
 Mohinder Singh Hanspal, General Manager Rolling
 Bharat Tank, General Manager Recycling & Melting
 Bipin Sharma, General Manager QMCI & Risk Management
 Mohammad Imtiaz Uddin Chowdhury, Deputy General Manager Sales & Marketing
 Mohammad Monir Hossain, Assistant General Manager Corporate Strategy
 Ruhi Murshid Ahmed, Assistant General Manager CSR
 A. K. M. Saifuddin Khan, Assistant General Manager Administration
 Md. Bazal Ahmed, Assistant General Manager Estates
 Mohammed Tamim Wahid Al-Helal, Senior Manager Information Technology
 Murtaza Zoher Bengali, Senior Manager Internal Audit
 Sanjoy Kumar Ghosh, Senior Manager Supply Chain Managemen

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2.7 ORGANOGRAM

Board of Director

Managing Director Director Finance

Deputy Managing General Manager Finance &

Director Accounts and Company
General Manager Human Secretary
Resources
General Manager
Corporate Affairs &
Dhaka Corporate
Assistant General Manager
Assistant General Manager &
Office CSR
Chief Financial Officer

Senior Manager Information

General Manager Technology
Manufacturing

Senior Manager Internal Audit

& Compliance
Assistant General
Manager
Administration

Assistant General
Manager Sales &
Marketing

Assistant General
Manager Estates

Senior Manager
Supply Chain

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 Part-3
Industry Analysis

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3.1 OVER VIEW OF THE INDUSTRY

Bangladesh is one of Asia's buoyant emerging steel markets and has a growing need for raw
materials and steelmaking technologies. The movement towards a progressive national economy
strongly depends on how the construction materials especially steel related industries have
evolved and such products are readily available. Steel is a basic raw material for infrastructural
development and multiple other uses. Fortunately, the country has a proud heritage for the art of
steel making and shaping for a long time.
The Government of Bangladesh has projected the economy to grow by 8.2% in FY2020.
Meanwhile, Asian Development Bank (ADB) has also forecasted the economy to grow by 8.0%
in FY2020, which makes Bangladesh as the fastest growing economy in Asia- Pacific region.
According to industry experts, there is a linkage between a country’s economic growth and growth
in steel consumption. If GDP is expected to grow by 8%, steel industry should grow by at least
16% per year.
The country’s economic activities took a turnaround in recent period. Increase in VAT and other
regulatory duties, implementation of new VAT law and strict field level enforcement along with
higher market competition, high interest rates and slow private credit growth etc. has significantly
affected industry demand and sales of various industries including steel as well. Meanwhile,
global economic slow-down has also started to affect the economy of the country. However, our
long term view remained positive as 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 government, individuals and institutional buyers in the real estate sector.
Implementation of the government’s huge infrastructural development plans have been driving
the double digit growth rate in the country’s steel industry and we expect that the industry will
also be enjoying strong growth in the next decade amid ambitious development initiatives by the
government. Besides, growing urbanization, industrialization, increased wage earners’ remittance
inflows and higher purchasing power of consumers are accelerating the growth in overall
construction sector.

3.2 MAJOR TYPES OF STEEL

Two types of steel:
1. Long Steel
2. Flat Steel

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 Different Types of Long Steels
Bar Rebar
Merchant Bars
Structural Beams
Channels & Angles
Tubes Oil country tubular goods (OCTG)

Other tubular products

Different Types of Flat Steels

1. Hot Rolled Sheets

2. Cold Rolled Sheets

3. Galvanized Plain (GP) Sheet

4. Coated Sheet

5. Plates

6. Corrugated galvanized roofing (C.I.) sheets

3..3 BANGLADESH STEEL INDUSTRY IS SELF-RELIANT

There is no exact year-to-year available data regarding the production and market share of the
steel industry of Bangladesh. However, in terms of production capacity for both finished and
semi-finished (billet) steels Bangladesh is now self-sufficient.
According to the industry players, Bangladesh’s combined annual installed capacity of producing
steel in 2018 was 8.5 million MT and the country has consumed 7.0 million MT steels which was
only 1.6 mill MT a decade ago. Installed capacity of producing steel will cross 9 million MT by
the end of 2019 and the production capacity to increase by another 3-4 million MT in the next
few years after completion of various ongoing and planned capacity expansion projects by various
industry players. It is expected that by 2030, steel consumption will reach 18 million Tons.
The country’s annual installed capacity for various long steel products like Rod, Angle, Channel,
Bar etc. is around 8.0 million MT and annual demand for long steel is 5.5 million MT. Besides,
within the flat steel products, the country’s present installed capacity is 1 million MT for cold
rolled steel and 0.4 million MT for color coated sheet.

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Even though industry capacity is higher than the domestic demand, the industry is exposed to
seasonality. Sales remains sluggish during the rainy season and higher in winter season. So, actual
production remains lower in the dull season. On an average 70-75% capacity utilization is termed
as optimal by the industry players.
The market size of steel is around BDT 450 billion. The local steel market grew at a rate of 15%-
20% in last two years from 8-10% per year previously.
Currently, 45 steel mills are the members of Bangladesh Steel Manufacturers Association
(BSMA) who manufacture over 80% of the steel products in the country.2 Moreover, major
industry players are injecting fresh investment in this sector to enhance their production capacity
to grab the potential of huge demand for the implementation of government’s gigantic
infrastructure development plans.

3..4 MAJOR PLAYERS IN THE MARKET

Company Name Capacity (In 1000 MT)

1. BSRM Group 1,500.0

2. Abul Khair Steel (AKS) 1,400.0

3. Kabir Steel Rolling Mills Ltd. (KSRM) 800.0

4. GPH Ispat Limited (GPH) 760.0

5. Mohsteel Limited 500.0

6. Anwar Ispat Limited 360.0

7. Shahriar Steel Mills Ltd. 216.0

8. Baizid Steel Industries Ltd. 206.0

9. Salam Steel Concast Re-rolling Mills Ltd. (SCRM 130.0

10. Ratanpur Steels Re-Rolling Mills Limited 187.2

30 | P a g e
3.5 MARKET SHARE:

Market Share

26%
38%

20%
3%
4%
9%

BSRM AKS KSRM GPH Ispat RSRM Rest of the companies

3.6 PORTER’S FIVE FORCES MODEL

The Five forces model developed by Michael E. Porter has been the most commonly used
analytical tool for examining the competitive environment. It describes the competitive
environment in terms of five basic competitive forces.
1. The treat of new entrants.
2. The bargaining power of buyers.
3. The bargaining power of suppliers.
4. The threat of substitute.
5. The intensity of rivalry among competitors.
(Strategic Management- Creating a competitive advantage)

Threat of New Entrants

Threat of new entrants is medium due to
 High capital requirement
 High scale economies
 Favorable government policy
 Low product differentiation as it does not fall into the magnificence or specialty goods.

31 | P a g e
Bargaining Power of Suppliers
The bargaining power of suppliers is low due to
 Low cost of switching suppliers
 Firm’s effort to produce raw materials by their own

Bargaining Power of Buyers

The bargaining power of buyers is moderate due to
 The products are used in the wide range of industries such as gas, oil and automobile,
shipping, consumer power and durables etc. But the number of reliable sellers is
comparatively low.
 The products are more or less standardized hence the prices are competitive.

Availability of Substitutes
It is medium to low due to
 Although usage of aluminum has been rising continuously in the automobile and
consumer durables sectors, it still does not pose any significant threat to steel as the latter
cannot be replaced completely and the cost differential is also very high.

Competitive Rivalry
Competitive rivalry is low due to
 Among over 400 active firms in the industry, the top 5 companies serve more than
half of the demand.

32 | P a g e
 Part4
Economic Analysis
of Bangladesh

33 | P a g e
4.1 ECONOMY OF BANGLADESH:

Bangladesh’s economic freedom score is 56.4, making its economy the 122nd freest in the 2020
Index. Its overall score has increased by 0.8 point, led by a higher score for property rights.
Bangladesh is ranked 29th among 42 countries in the Asia–Pacific region, and its overall score is
well below the regional and world averages.

Bangladesh has made steady albeit incremental progress toward greater economic freedom during
the past five years. Although its economy has remained stuck in the mostly unfree category, its
GDP growth during the same period has been robust. A welcoming attitude toward foreign
investment and restraint on the growth of government may partially explain the discrepancy.

For Bangladesh finally to break into the ranks of the moderately free, the government would have
to make a sustained, multiyear effort to improve the three rule-of-law indicators and permit the
entry into the country of more international banks and the best practices they would bring with
them. (www.heritage.org/index/country/bangladesh)

For economic analysis of Bangladesh, I have considered the following indicators:

a) GDP
b) GDP Growth Rate
c) Inflation Rate
d) Per Capita Income
e) Unemployment Rate

4.2.1 GDP

The Gross Domestic Product measures the value of economic activity within a country. Strictly
defined, GDP is the sum of the market values, or prices, of all final goods and services produced
in an economy during a period of time. The BDT 500 billion sized industry has the production
capacity of 8 million MT. Having the growth rate of 37.5% in 2018 total consumption of
Bangladesh was 7.5 million MT. According to the leading manufacturers, more than 3 million
MT of steel was produced in 2015 representing a market value of $3.57 billion which is estimated
to double by 2022. the Steel Industry of Bangladesh accounting to up to 2% of the GDP, the
importance of steel in our economy is irreplaceable.

34 | P a g e
 GDP (BILLION USD)
350.0
274.0 286.0
300.0
249.7
250.0 221.4
195.1
200.0
150.0
100.0
50.0
0.0
2015 2016 2017 2018 2019

(www.tradingeconomics.com)

During the ruling period of this govt. of Bangladesh the economy has come a long way. Economy
has seen a positive change than before. Government works with a vision to accomplish. This govt.
has taken many projects to meet the goal. ICT sector has seen a revolutionary change which is
area of focus by this government. Bangladesh is one of fastest growing economies in the world
now. It has attracted more foreign investment than before. In 2019 the value of GDP was 286
million USD which is the highest ever.

4.2.2 GDP Growth Rate

The GDP growth rate indicates how quickly or slowly the economy is growing or shrinking.

GDP GROWTH RATE%

9.0 7.9 8.2
8.0 7.6
7.1
7.0 6.6
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2015 2016 2017 2018 2019

(www.tradingeconomics.com)

Bangladesh has a healthy growth rate of GDP over the past 5 years. It has crossed the 8% mark
for the very first time in the history which shows the growing phase of the economy. The
government intends to keep this rate in the upcoming years.

35 | P a g e
4.2.3 Inflation Rate

Inflation is the rate at which the cost of goods and services rises over time. It could also be thought
of as a reduction in the value of a currency, because consumers are now able to purchase less than
they previously could with the same amount of money.

INFLATION RATE %
6.3
6.2 6.2
6.1
6.0
5.9
5.8
5.7 5.7
5.7 5.6 5.6
5.6
5.5
5.4
5.3
2015 2016 2017 2018 2019

(www.tradingeconomics.com)

Though the economy of Bangladesh has seen a upward trend in the recent years but it has failed
to reduce the level of inflation. The inflation is always growing which is a very bad indicator for
economy. It says that purchasing power of people has not improved though the income is growing.

4.2.4 Per Capita Income

Per capita income is a measure of the amount of money earned per person in a nation or
geographic region. Per capita income can be used to determine the average per-person income for
an area and to evaluate the standard of living and quality of life of the population. Per capita
income for a nation is calculated by dividing the country's national income by its population.

PER CAPITA INCOME (USD)

2500.0

2000.0 1905.0
1750.0
1606.0
1458.0
1500.0 1303.0

1000.0

500.0

0.0
2015 2016 2017 2018 2019

36 | P a g e
 (www.tradingeconomics.com)

In the recent years, there has been a huge change in per capita income of Bangladesh. Last year
was the highest which was 1905 $. But in the end it has not mattered in a big deal because a huge
number of people live under poverty line and the ever growing inflation rate has not helped the
cause.

4.2.5 Unemployment Rate

The unemployment rate is the share of the labor force that is jobless, expressed as a percentage.
It is a lagging indicator, meaning that it generally rises or falls in the wake of changing economic
conditions, rather than anticipating them. When the economy is in poor shape and jobs are scarce,
the unemployment rate can be expected to rise. When the economy is growing at a healthy rate
and jobs are relatively plentiful, it can be expected to fall.

UNEMPLOYMENT RATE %
4.4
4.3
4.3
4.3
4.2 4.2 4.2
4.2
4.2
4.1
4.1
4.1
4.0
2015 2016 2017 2018 2019

(www.tradingeconomics.com)

Though GDP of Bangladesh has a very positive trend but not much of a change in the
unemployment rate which indicates that govt. and private have not been able to create
opportunities for the employment seekers up to the expectation. Every year thousands of fresh
graduates are coming out but they are failing to find jobs according to their expectations. One big
reason is their skill level which compels the companies to hire from abroad. A noticeable number
people work in Bangladesh and taking away a big sum of money. So govt. and private sectors
should try and focus on the improvement of skill level of local people together.

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

37 | P a g e
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.

4.2 STEEL INDUSTRY CONTRIBUTION TO BD ECONOMY:

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 smaller 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 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 re-rolling mills in
Bangladesh depend on scrap, leading to lower quality rods used in the market. Very few re-rolling
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
hollows. The idea of developing a viable steel sector appears implausible seeing that Bangladesh
has no iron or as one of its mineral resources. But absence of ore does not disqualify a country
from becoming a producer of steel and steel based product.

38 | P a g e
4.2.1 Emerging Market

Bangladesh is one of Asia’s strongest emerging steel markets and with a growing need for raw
materials and manufacturing technologies. However, since USA’s 25% and 10% tariffs
announced on steel and aluminum imports, there has been a scarcity in the market for scrap
imports required for steel production. This in turn has led to a significant increase in the price of
rods, a vital material required for infrastructure projects. Scrap, sponge, and pig iron are major
raw materials for steel smelting in Bangladesh with imports growing from 2.5 Mn MT in 2016 to
4-4.5 Mn MT in 2018. Mirroring the cement industry, the demand for steel is met mainly from
individuals, government, and institutional buyers in the real estate market

4.2.2 Import raw material

Bangladesh is heavily reliant on imports of semi-finished and finished steel products as well as
flat products while being strategically positioned next to the top two steel producers in the world,
China and India. The majority of imports are scraps, flat products, and semi-finished and finished
steel products making up a total of 6.992 Mn MT or over 93% of all imports.

39 | P a g e
Shipbreaking yards on the outskirts of the major port city Chittagong, are also a major source of
steel for the country. It is also the largest shipbreaking center in the world. Shipbreaking was
formally recognized before 2011. In 2016, it generated 10 Mn MT of steel, meeting 60% of the
entire country’s consumption Unfortunately, of the many labor intensive industries in Bangladesh,
shipbreaking is notorious for its dangerous practices and working environments leading to global
regulatory bodies discouraging delivery of ships to the port.

Given the nature of steel businesses as heavy manufacturing, cost of production for goods sold
can be as great as 80-90% of revenue. The business mainly relies on importing billet, the main
raw material required for production. Although the local market is capable of meeting over 90%
of demand for billets a considerable amount of imports is still required due to the majority of
production is used as a backward linkage for producer’s own re-rolling mills. Currently the
majority of consumption is by government infrastructure projects, developments in real estate
(mainly rural areas), and by commercials/public institutions.

4.2.3 Steel Industry in BD capital market

BSRM BSRM RSRMS GPHIS SSSTE SALA APOL

STEEL LTD TEEL PAT EL MCRS OISPA
T T

Relative Position (As on 24th

December 2019)

Current Price 39.6 48.9 24.1 25.2 23.3 19.1 4.1

52 Week Range 39.0- 48.8- 23.5- 24.5- 20.4- 19.0- 3.8-

66.1 87.0 56.9 39.9 55.0 36.5 11.0

No. of Shares (in 376.0 236.1 101.2 360.2 245.0 98.4 401.3
Million)

Free-Float* 110.8 139.4 53.6 181.5 165.8 52.2 320.1

EPS (annualized) 1.5 4.1 2.2 1.8 3.2 1.2 -.2

Dividend (C/B)% 10/10 10/10 12/0 0/10 5/10 10/0 0/3

40 | P a g e
 NAVPS 56.0 98.5 50.0 18.0 16.2 19.8 19.4

P/E (x) 26.1 11.9 11.0 13.7 7.3 15.9 n/a

P/B (x) 0.7 0.5 0.5 1.4 1.4 1.0 0.2

Market Share (Stand- 12.2% 8.8% 1.7% 2.2% 0.8% 0.9% 0.9%
alone)

41 | P a g e
 Part-5
External Environment
Analysis

42 | P a g e
5.1 PESTLE ANALYSIS

Analysis of PESTLE, now and then referred to as PEST examination, is an idea for the promotion
of standards. Furthermore, this idea is used by organizations as an instrument to follow the earth
in which they work or intend to dispatch other tasks, items or administrations, etc.

PESTLE is a thought which in its extended structure means P for political, E for economic, S for
social, T for technological, L for lawful and E for environmental. It provides a 10,000-foot
overview in overall condition from a broad spectrum of edges to be checked and monitored while
mulling over on a particular idea or plan.

1. Political and Legal

Political turmoil turned fierce for quite a while in January and February 2015 upsetting
creation, transportation and different administrations. The nation likewise persevered
through strikes, compounding this stun. Instructive organizations shut, interchanges were
hindered and wellbeing lessened.
Government is introducing the various rules and regulations of this particular industry.
The government is about to paying the more attention in the health policies of the
employees which are working with the steel industry. Special health incentives and rules
are introduced in the steel industry.
2. Economic
Bangladesh Steel and Rod Industry is growing as the Bangladesh economy is charging
towards record development figure for the second continuous year, driven by twofold digit
development in assembling and development parts. Gross domestic product development
in monetary 2019-20 is probably going to be 7.8 percent, up from 8 percent a year sooner,
according to the gauge of the Bangladesh Bureau of Statistics. This is the third back to
back year that the financial development was over 7 percent following quite a while of
moping in the area of 6 percent.

3. Social
Despite boom times, the unemployment rate only declines below 4-5 percent from time to
time. There are persons who move constantly between different economic fields or
between urban communities. At the point when the economy enters subsidence,
unemployment can reach much higher numbers at that point, sometimes even in the double
digits. The organization has constantly looked for the most capable and goal-oriented
individuals to lead it in a regularly changing world with new challenges in the skyline.

43 | P a g e
 4. Technological
The iron and steel industry is a colossal process industry, and its establishment is plant
design that extends from plant construction and maintenance to increase their useful life.
Despite traditional needs, plant engineering today should meet a broad range of additional
requirements, for example: Higher yield, better quality of the products and greater quality
assurance of the products.
5. Environmental
Though the steel industry is encouraging the many sectors and the encouraging the
development it is creating the unfavorable environment in the nature. The all leading
industries are following the environmental acts which are declared by the governments,
though it is creating very bad impact on the environment. Many industries are using the
pollution control equipment and energy saving equipment but that is not sufficient in the
nature. The least importance is given to the environmental aspect.

44 | P a g e
 Part-6
Internal Environment
Analysis

45 | P a g e
6.1 PRODUCT LIFE CYCLE:

BSRM has several featured Bar & Steel available in market. Among them 6 types of bar are taken
into Consideration to create the PLC char

t.

Introduction:
Epoxy Coated Bars, Centura and Ultima are in still in Introduction stage.

Growth:
This stage of product life cycle for many years competing with other big seller such as AKS,
KSRM. BSRM maxima is in growth stage as sales is increasing

Maturity:
BSRM is the still top selling steel and bar in Bangladesh. For first time in the history of BSRM
Group, sales have crossed one million M. ton in the year of 2016.Xtreme 500W generating highest
cash flow for the company

Decline:
High strength cold twisted steel Bars Torsteel launched in 1984 but it lost its all glory and went
out of the market

46 | P a g e
6.2 VALUE CHAIN

Value chain is termed as “a chain of value-added activities; products pass through the activities
in a chain, gaining value at each stage”. (Michael E. Porter 1985) First acclimated the value chain
concept in his book “Competitive Advantage: Creating and Sustaining Superior Performance”.
Value chain is utilized to an individual association's inventory network systems. It needs
expansion of significant worth for every single action through which the item/administration
travels through the item life cycle.

The value chain model set up by Porter can be used as a conventional model with five essential
activities and four supporting activities. According to the concept of operations, with five main
operations and six supporting activities, an alternative depiction of the value chain for the steel
manufacturing industry can be used. The state of the stainless steel sector value chain will be
equivalent to that of Porter yet the thing that matters is in a portion of the activities and their
application. The figure on every activity are given as pursues:

(“Competitive Advantage: Creating and Sustaining Superior Performance”)

5.3.1 Value Chain - Primary Activities

Incorporates the mechanism of adjustment of vital crude materials into final yield /items including
the transmission of basic crude materials from suppliers and yield / item advertising to customers.
They are assembled into two types of item and market recognized exercises. Item associated
actions are the company's completed activities that contribute value to the items and services. For
instance

47 | P a g e
6.2.1 Primary Activities

1. Operation Management: Dealing with and handling raw items, coke, calcinated dolomite,
pitch bonded magnesia brick, iron and steel manufacturing, wires, billet, TMT Bar, angles,
channels, repair of rolls, and many other activities are related. Besides, planning, monitoring
production, design, assets of production sites, manufacturing or buying of spares and required
items for plant, repairing activities are also included.

2.Inbound Logistics
Receiving basic raw materials for steel making process, stacking and reclaiming items so also
distributing to various manufacturing sites, etc.

3.Outbound Logistics Planning and dispatch, distribution management, transportation,

warehousing, order fulfillment.

4. Marketing and Sales Product, price, place and promotion- 4P management, export, domestic
export and sales, customized sales, pricing policy, contract, CRM and many other activities.

5. Customer Service Quality Aspects, pre/post-sales communication, issue settlement, etc.

6.2.2 Value Chain – Supporting Activities

These activities do not legitimately contribute in the transformation procedure. However, they
facilitate the essential activities in their capacities. For instance

1. Material Management
✓ Purchase includes selection of suppliers, receiving purchase requisitions from plant
site, procuring raw materials, machineries, consumables and other essentials are ensured
to be supplied.
✓ Logistics involves transporting goods and imported items from port, acquiring port
facilities, handling vessels at port and related activities.
✓ Vendor Development involves performance rating, monitoring, encouraging and
interaction with existing or new suppliers, tracing exploring new sources and many other
related activities.

48 | P a g e
 ✓ Warehouse incorporate stock control, issue of spares and consumables to different
plant site, disposal of rejected extras and consumables, custody of raw materials and
finished products, etc.

2. Human Resource Management: Our people, our asset.

Success isn’t possible without a great team. At BSRM Group of Companies, nurturing and
supporting human talent is of utmost priority to us. We believe sustainable growth is only possible
if we foster teamwork, develop talent, enhance leadership capability, and maximize the potential
of our human capital.

We focus on our valued people to optimize their creativity and performance by ensuring a safe
and congenial working environment, cohesive corporate culture, appropriate training, reward and
recognition, and various employee benefits schemes. Hiring the right person for the right job is
the first step in our efforts to maintain a strong, capable, and independent workforce.

Being an Employer of choice, we aspire to align our people with our Vision and Values and make
them a key factor for success in business transformation and change process. We are committed
to achieve excellence in every step of our operation through different functions, projects, and
initiatives. We work strategically with all stakeholders to provide leadership and guidance in the
development, implementation, and equitable administration of policies and procedures, thus
fostering a positive working environment.
 Talent Acquisition
 Training & Development
 Health, Safety, Environment
 A well-designed Succession Planning policy
 Benefit Policy
 Rewards and Recognitions
 Equal Opportunity Employer

3. Technology Development:

BSRM Group was founded more than 60 years before and continuing its rapid growth more so in
the past decade. In such complex rapid growing scenario IT based business friendly solution is
the only way to handle all the data.

49 | P a g e
BSRM IT through Management foresight managed to keep up with this fast & complex growth
as an organized entity and began to systematically address the challenges. Today IT as a strategic
partner in business enablement plans, controls, and manages all IT based business issues in a very
constructive, productive & controlled manner with periodic reporting & monitoring.

BSRM IT is managing the total network of BSRM Group including server management,
managing and upgrading Oracle eBS, developing in-house software integrating with Oracle eBS
and providing several levels of supports to end user.

Last year BSRM IT has focused on ERP up-gradation by modifying and creating various
Customization, personalization, reports

 Research and Development (R&D)

 quality assurance,
 process automations, etc.

4. Service Management Includes corporate workplaces, corporate vital administration, corporate

correspondences, data innovation, and so forth.

5. Project Management Construction and venture monitoring for plant extension, design and
engineering for existing or new plants, project contracts, and so on.

Value Chain Margin:

Margin is the contrast between the all-out worth made at various capacities/activities in the value
chain and summation of expense incurred by the company to make such values. Certain expense
is incurred by the organization for making an incentive for its final merchandise and
administration

50 | P a g e
6.3BCG MATRIX CHART

BSRM has several featured Bar & Steel available in market. Among them 6 types of bar are taken
into Consideration to create the BCG Matrix.

The chart showing four different level of competitive position.

Stars – High market share high market growth.

Question mark – Low market share high market growth.

Cash cows – High market share low market growth.

Dogs – Low market share low market growth.

According to this Boston Consulting Group Matrix analysis BSRM Xtreme is in the position of
Star because it has High market share and High market growth. BSRM Maxima & BSRM
Strong are in the position of Cash cow as High market share & Low market growth. BSRM
Ultima & BSRM Centura are in the position of Question mark as Low market share & High
market growth. BSRM Torsteel is in the position of dog because it has Low market share & Low
market growth.

51 | P a g e
6.4 BALANCE SCORECARD

Balanced scorecard is a strategy performance management tool – a semi-standard structured

report, that can be used by managers to keep track of the execution of activities by the staff within
their control and to monitor the consequences arising from these actions. Here I have identified
the problems and have given the solutions based on them.

Key Factors:

 Financial
 Customer
 Internal
 Learning & Growth

52 | P a g e
6.5 VRIO ANALYSIS
VRIO framework is the tool used to analyze firm’s internal resources and capabilities to find out
if they can be a source of sustained competitive advantage.
VRIO Model
Valuable? Rare? Inimitable? Organized? Implication for
Competitiveness
No Competitive
Disadvantage
Yes No Competitive Parity

Yes Yes No Temporary

Competitive
Advantage
Yes Yes Yes No Unused
Competitive
Advantage
Yes Yes Yes Yes Sustainable
Competitive
Advantage

BSRM LTD

Valuable: Does BSRM LTD offer something valuable? “Yes”

Rare: Is the resources rare? “Yes”

Inimitable: Is it inimitable? “No”

Competitiveness: Temporary Competitive Advantage

53 | P a g e
6.6 RATIO ANALYSIS

Ratio analysis is a powerful tool of Financial Analysis. The relationship between two accounting
figures, expressed mathematically is known as financial ratio. A ratio is used as an index or
yardstick for evaluating the financial position and performance of a firm. Ratio Analysis
highlights the liquidity, solvency, profitability, capital gearing etc. The technique serves as a tool
for assessing the current and long term financial soundness of a business. It also used to analyze
various aspects of operating efficiency and level of profitability.

Ratio

Short term solvency or a) Current ratio

liquidity ratios b) Quick ratio
c) Cash Ratio

Long term solvency or a) Total debt ratio

financial leverage ratios b) Debt equity ratio
c) Equity multiplier
d) Times interest earned ratio
e) Cash coverage ratio

Asset utilization or a) Inventory turnover ratio

turnover ratio b) Day’s sales in inventory
c) Receivable turnover
d) Day’s sales in receivable
e) Total asset turnover
f) Capital intensity

Profitability ratios a) Profit margin

b) Return on asset
c) Return on equity

54 | P a g e
 Short Term Solvency

a. Current ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Current Asset 39,014,321,356 31,685,544,730 22,384,352,203

Current liabilities 33,888,181,620 29,799,375,094 20,313,439,028
Current Ratio 1.15 1.06 1.10
The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations
or those due within one year. Acceptable current ratios vary from industry to industry and are
generally between 1.5% and 3% for healthy businesses. So BSRM LTD has a lower current ratio
in the last three years.

b. Quick ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Current Asset 39,014,321,356 31,685,544,730 22,384,352,203

Inventory 14,990,097,612 14,451,900,658 7,015,414,276
Current liabilities 33,888,181,620 29,799,375,094 20,313,439,028
Quick Ratio 0.71 0.58 0.76

The quick ratio indicates a company's capacity to pay its current liabilities without needing to sell
its inventory or get additional financing. A company with a quick ratio of less than 1 cannot
currently fully pay back its current liabilities. BSRM LTD has got lower quick ratio in the last
three years which means they have lacking in paying current liabilities.

55 | P a g e
 c. Cash Ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Cash 914,756,422 524,690,721 73,899,991

Current liabilities 33,888,181,620 29,799,375,094 20,313,439,028
Cash Ratio 0.03 0.02 0.00

The cash ratio indicates the amount of cash that the company has on hand to meet its current
liabilities. A cash ratio of 0.2 would mean that for every taka the company owes creditors in the
next 12 months it has 0.2 in cash. 0.2 is considered to be the ideal cash ratio. GPH LTD has kept
good cash ratio in the last two years.

Long term solvency ratio

a. Total debt ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Total Asset 65,808,185,796 45,680,555,312 32,624,960,953

Total equity 20,897,219,619 12,808,900,532 10,342,290,853
Total debt Ratio 0.68 0.72 0.68

The debt ratio is a financial ratio that measures the extent of a company's leverage in terms of
total debt to total assets. A debt ratio greater than 1.0 (100%) tells that a company has more debt
than assets. BSRM LTD is not in good position in terms of total debt ratio.

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 b. Debt equity ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Total debt 44,910,096,517 32,871,654,780 22,282,670,100

Total equity 20,897,219,619 12,808,900,532 10,342,290,853
Debt Equity Ratio 2.15 2.57 2.15

The debt to equity ratio is a financial, liquidity ratio that compares a company’s total debt to total
equity. The debt to equity ratio shows the percentage of company financing that comes from
creditors and investors. A good debt to equity ratio is around 1 to 1.5. BSRM LTD has bigger
debt equity ratio which is not a good sing

c. Equity multiplier

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Total Asset 65,808,185,796 45,680,555,312 32,624,960,953

Total equity 20,897,219,619 12,808,900,532 10,342,290,853
Equity Multiplier 3.15 3.57 3.15

The equity multiplier is a financial leverage ratio that measures the amount of a firm's assets that
are financed by its shareholders. Companies with a low equity multiplier are generally considered
to be less risky investments because they have a lower debt burden. BSRM LTD has higher Equity
Multiplier

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 d. Times interest earned ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

EBIT 2,338,262,107 2,308,532,431 224,998,762

Interest 1,221,380,259 1,011,743,683 374,796,539
Times interest earned 1.91 2.28 0.60
ratio

The times interest earned ratio is an indicator of a corporation's ability to meet the interest
payments on its debt. An organization that has a times interest earned ratio greater than 2.5 is
considered an acceptable risk. So, BSRM LTD is in good position in terms of this.

e. Cash coverage ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

EBIT 2,338,262,107 2,308,532,431 224,998,762

Depreciation 459,637,454 624,752,512 683,550,000
Interest 1,221,380,259 1,011,743,683 374,796,539
Cash Coverage ratio 2.29 2.90 2.42

The cash coverage ratio is useful for determining the amount of cash available to pay for a
borrower's interest expense. The ideal ratio is anything above 1.0. So, BSRM LTD looks in better
position according to this.

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 Asset Utilization

a. Inventory turnover ratio

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Cost of goods sold 56,008,238,101 43,410,457,954 28,444,663,016

Inventory 14,990,097,612 14,451,900,658 7,015,414,276
Inventory Turnover 3.74 3.00 4.05

It measures how many times a company sold its total average inventory dollar amount during the
year. The ideal inventory turnover ratio is about 4 to 6. All businesses are different, of course, but
in general a ratio between 4 and 6 usually. It looks like BSRM LTD is no in good position.

b. Day’s sales in inventory

July 2018-June 2019 July 2017-June July 2016-June 2017

2018
Days 365 365 365
Inventory Turnover 3.74 3.00 4.05

Day's sale in Inventory 97.59 121.67 90.12

The day’s sales of inventory (DSI) is a financial ratio that indicates the average time in days that
a company takes to turn its inventory. The data says that BSRM LTD is not stable in this ratio.

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 c. Receivable turnover

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Sales 61,060,152,014 48,289,925,736 32,683,571,946

Accounts receivable 10131693870.00 6460423147.00 3448601088.00

Receivables turnover 6.03 7.47 9.48

Accounts receivable turnover is the number of times per year that a business collects its average
accounts receivable. Accounts receivable turned over 5.30 times during the past year, which
means that the average account receivable was collected in 69 days.

d. Day’s sales in receivable

July 2018-June 2019 July 2017-June July 2016-June 2017

2018

Days 365 365 365

Receivables Turnover 6.03 7.47 9.48

Day's sale in Receivables 60.53 48.86 38.50

Days' sales in receivables, measures the number of days it takes a company to collect cash from
its credit sales. It looks like BSRM LTD is falling behind in terms of this.

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 e. Total asset turnover

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Sales 61,060,152,014 48,289,925,736 32,683,571,946

Total Asset 65,808,185,796 45,680,555,312 32,624,960,953
Total asset turnover 0.93 1.06 1.00

The asset turnover ratio measures the efficiency of a company's assets to generate revenue or
sales. This data indicates that the efficiency of BSRM LTD has decreased.

f. Capital intensity

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Total Asset 65,808,185,796 45,680,555,312 32,624,960,953

Sales 61,060,152,014 48,289,925,736 32,683,571,946

Capital Intensity 1.08 0.95 1.00

Capital intensity ratio of a company is a measure of the amount of capital needed per taka of
revenue. It looks like that the company needed more capital to generate per taka of revenue in the
last years.

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 Profitability Ratio

a. Profit margin

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Net Income 1,728,128,823 1,800,795,558 1,648,035,691

Sales 61,060,152,014 48,289,925,736 32,683,571,946

Profit Margin 0.03 0.04 0.05

The profit margin ratio compares profit to sales and tells how well the company is handling its
finances overall. It tells that BSRM LTD’s profit is declining from last three years.

b. Return on asset

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Net Income 1,728,128,823 1,800,795,558 1,648,035,691

Total Asset 65,808,185,796 45,680,555,312 32,624,960,953

Return on Asset 0.03 0.04 0.05

The return on assets ratio measures how effectively a company can earn a return on its investment
in assets. ROAs over 5% are generally considered good. So, the table says that BSRM LTD has
a decreased ROA in last two years which is not a good indicator.

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 c. Return on equity

July 2018-June 2019 July 2017-June 2018 July 2016-June 2017

Net Income 1,728,128,823 1,800,795,558 1,648,035,691

Total equity 20,897,219,619 12,808,900,532 10,342,290,853
Return on Equity 0.08 0.14 0.16

The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders’ investments in the company. In other words, the return on
equity ratio shows how much profit each dollar of common stockholders' equity generates. ROEs
of 15-20% are generally considered good. It looks like BSRM LTD has a decreased ROE from
last three years

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 Part-7
Problem Identification

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7.1 OPPORTUNITIES & THREATS:

Factors Relative Weight Score Weighted Opportunity Threats(F)

importance (B) (C) Score(D) (E)
(A)

Rating (1- A/∑A (1-10) B*C largest of (D) Largest (A-

10) C)
Social factors

Increase local 8 0.07 8 0.57 O2 0

demand for the
product

Increased 5 0.04 5 0.22 0

Dependency on
Real Estate
Industry

0 0 0
Economic factors 0 0 0

Economic crisis 9 0.08 2 0.16 7 T1

Low Labor Rate 6 0.05 5 0.27 1

Interest rate and 8 0.07 3 0.21 5 T3

Exchange Rate

GDP 8 0.07 7 0.5 O4 1

Unavailability 7 0.06 1 0.06 6 T2
and Cost of raw
materials

0 0 0
Political Factors 0 0 0

Govt. Mega 7 0.06 9 0.56 O3 -2

Project
Low pressure of 6 0.05 5 0.27 1
gas

Power Crisis 6 0.05 6 0.32 0

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 0 0 0
Technology 0 0 0

Industrialization 9 0.08 8 0.64 O1 1

and
infrastructural
expansion
Change in 7 0.06 3 0.19 4 T4
Technology

0 0 0
0 0 0
Competitive 0 0 0
factors

Ability to expand 7 0.06 7 0.44 O5 0

production

Potential to 6 0.05 5 0.27 1

export steel+
Increasing no of 8 0.07 4 0.29 4 T5
competitors

Increasing 5 0.04 6 0.27 -1

Competitor
production
Capacity
112

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7.2 STRENGTH & WEAKNESS:

Factors Relative Weight Score Weighted Strengths Weaknesses(F)

importance (B) (C) Score(D) (E)
(A)

Rating (1-10) A/∑A (1-10) B*C largest of Largest (A-C)

(D)
Strong 8 0.07 8 0.56 S2 0
Marketing
Line up
Short term 5 0.04 5 0.22 0
liquidity crisis

Inventory 5 0.04 6 0.26 -1

Turnover
Energy crisis 9 0.08 2 0.16 7 W1
Satisfying 6 0.05 5 0.26 1
Annual
Dividends
Comparative 8 0.07 3 0.21 5 W3
Price High
High skilled 8 0.07 7 0.49 S4 1
employee
High debt 7 0.06 1 0.06 6 W2
Profit Margin 8 0.07 6 0.42 2

Advance 7 0.06 9 0.55 S3 -2

Technology
Earing Per 6 0.05 5 0.26 1
Share
Strong Brand 6 0.05 6 0.32 0
Value
Largest 9 0.08 8 0.63 S1 1
production
capacity
Dependency 7 0.06 3 0.18 4 W4
on import for
raw material
Strong Retail 7 0.06 7 0.43 S5 0
and
Distribution
Low profit 8 0.07 4 0.28 4 W5
margin
114

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7.3 PROBLEMS BASED ON ANALYSIS
According to the above observations we like to draw the following problems for recommendations
1. Economic crisis makes a huge impact on the overall performance of the company
2. Unavailability and high Cost of raw materials
3. It is difficult to cope up with changes in Technology
4. Increasing no of competitors more than before
5. Facing severely Energy crisis
6. Price is high comparatively than the other competitors
7. High debt decreasing profit
8. High dependency on import for raw material
9. Generating low profit margin

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 Part-8
Solution of the Problems

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8.1 SWOT MATRIX:

SWOT Matrix Strength Weakness

1. Largest production Capacity 1. Energy Crisis

2.Strong Marketing Line Up 2. High debt

3. Advance Technology 3. Comparative price high

4. High skilled employee 4. Dependency on import for raw
material
5. Strong retail and distribution 5. Low profit margin

Opportunity SO WO
1. Industrialization and Use latest technology and Establish Power Plant (W1 ;
infrastructural production capacity to grab the O2,3,4)
expansion benefit of government policy
for industrialization
( S1,3 ;O1)
2. Increased local Capitalize Advance Reducing debt by increasing
demand for the Technology and Marketing share market value (W2 ; O2,4,5)
products Line up for capturing local
market (S3,2 ;O2)
3. Govt. Mega Project Use latest technology and Reducing price by increasing
production capacity and High production and meeting local
skilled employee to grab the demand (TW ; O1,2,5)
government project and
complete successfully (S1,3,4
;O3)
4. GDP Full fill the increasing demand Emphasis on local supplier or
and opportunity through strong collect raw material through own
capacity and marketing sources (TW ; O1,5,2)
strategy. (S1,2,5 ;O4)
5. Ability to expand Increase product portfolio and Market expansion and sales
production and product capacity through advance increase (W5;O5,3,2)
line technology and strong
marketing line up and skilled
employee. (S1,3,4 ; O5)
Threat ST WT

1. Economic crisis Establish Utility/Crisis Establish Power Plant can create

Management Team competitive advantage in
(S4,2,5;T1) economic crisis (S3; W1 ; T1)

2. Unavailability and Strong Supply Chain Team Emphasis on local supplier or

Cost of raw materials (S2,4;T2) collect raw material through
different sources (S4; W4 ; T,2)

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 3.Interest rate and Strong procurement team form Reducing debt and dependency
Exchange Rate monitoring import and on import reduce the risk of
exchange rate(S4,T3) interest and exchange rate
(W3,4;T3)
4. Change in Establish R&D (S4,3;T4) Adaption modern technology can
Technology reduce price (W3;T4)
5. Increasing no of Create Competitive Advantage Business strategy for market
competitors (S1,2,3 ;T5) expansion can increase profit
margin and reduce competition
(W5;T5)

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 Part-9
Recommendation
& Conclusion

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9.1 RECCOMENDATIONS
According to the above observations we like to enclose the following recommendation for the
improvement:
1. Expansion of forward and backward linkage through long term planning.
2. As the new competitors are entering market with improved capacity BSRM should be concern
about capacity expansion.
3. Should minimize the dependency on imported raw material.
4. Maintain collaborative network for raw materials import thus use effectiveness in purchase
strategy.
5. Arrange a utility management team as early as possible for continuous operation.
6. Huge market exposure is required to penetrate the market to limiting the fixed cost burden.
7. Always keep eye on development of innovative technology

9.2 CONCLUSION
BSRM is the capital intensive mills. It is fully automated process. Bangladesh Steel Re-Rolling
Mills Ltd, it is obvious that, they are producing quality product. There is a great demand of their
product in the real estate business. It is also a pioneer and leading industry in the field of Steel.
The several departments in this industry are operating their respective activities smoothly and
efficiently. The production, sales and marketing activities of the company are expanding day by
day in countrywide.

Steel Industry of Bangladesh is a rapidly expanding market. BSRM Ltd has come into the industry
with its full strengths but it is facing some problems. From my close observation I have found
some problems as well as some tremendous prospects. Finally, I have put some recommendations
in this regard and believe that if they put concern on these they can surely compete satisfactorily
in the modern and competitive business arena.

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4 REFFERENCES
1. Dess G., Eisnar A., Lumpkin G.T., McNamara G. - 2011. Strategic Management-
Creating a competitive advantage
2. BSRM LTD Annual Report 2017, 2018, 2019.
3. Habib N. 2018. Steel Industry Review.
4. Haque A. M. and Abdullah A. -2019. Bangladesh Steel Industry: A Comprehensive
Review.
5. World Steel Association- 2019
6. www.heritage.org/index/country/bangladesh
7. www.tradingeconomics.com
8. www.bsrm.com
9. www.investing.com
10. www.lightcastlebd.com
11. www.thedailystar.net

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