The steel industry in Bangladesh is booming. Most important, the demand for steel products is rising due to rapid infrastructure development, urbanization, and industrial growth. Among various steel businesses, a Steel Re-Rolling Mill stands out as a profitable and sustainable venture. This project profile will guide investors, entrepreneurs, and stakeholders on how to set up a steel re-rolling mill in Bangladesh with detailed insights, costs, production capacity, and profitability.
1. Introduction to Steel Re-Rolling Mill
A steel re-rolling mill processes billets or scrap steel into finished steel products such as rods, bars, angles, channels, and wires. The mill works on the principle of hot rolling, where steel is heated and passed through rollers to achieve desired shapes and sizes.
Besides that, steel re-rolling mills contribute to local employment, support construction projects, and reduce dependency on imported steel. The Bangladesh steel market is expected to grow further, making this industry highly attractive for investment.
2. Market Potential in Bangladesh
The construction and real estate sectors in Bangladesh are experiencing unprecedented growth. Key drivers include:
- Infrastructure development by the government (roads, bridges, metro rail)
- Housing demand due to urbanization
- Industrial expansion (factories, warehouses)
- Private real estate projects
According to industry reports, Bangladesh consumes over 3 million tons of steel annually, yet domestic production cannot fully meet the demand. Therefore, a well-planned steel re-rolling mill can capture a significant market share.
3. Production Capacity
The production capacity depends on the mill size, machinery, and working shifts. Below is a standard configuration for a medium-scale steel re-rolling mill.
| Parameter | Specification | Unit | Notes |
|---|---|---|---|
| Daily Production | 20 | Tons/day | 8 hours shift |
| Annual Production | 6000 | Tons/year | 300 working days/year |
| Product Type | TMT Bars, Rods, Angles | – | Standard sizes |
| Raw Material | Billets or Scrap Steel | Tons | High-quality billets preferred |
| Working Shift | 8 | Hours | Optional 2nd shift for extra output |
4. Land and Infrastructure Requirement
Most important, selecting the right land and infrastructure is crucial. The mill requires adequate space for machinery, storage, and logistics.
| Item | Requirement | Approx. Cost (BDT) | Notes |
|---|---|---|---|
| Land | 1.5 – 2 acres | 10,000,000 – 15,000,000 | Industrial zone recommended |
| Factory Building | 5000 – 7000 sq.ft | 8,000,000 – 12,000,000 | RCC structure preferred |
| Storage Shed | 2000 sq.ft | 2,000,000 | For raw material & finished goods |
| Office & Admin | 500 sq.ft | 1,500,000 | Includes utilities |
5. Machinery and Equipment
High-quality machinery ensures efficiency, product quality, and long-term profitability.
| Equipment | Quantity | Cost (BDT) | Notes |
|---|---|---|---|
| Re-Rolling Mill Machine | 1 | 35,000,000 | 20-ton/hour capacity |
| Shearing Machine | 1 | 2,500,000 | For cutting bars |
| Billet Heating Furnace | 1 | 12,000,000 | Gas or induction furnace |
| Cooling Bed | 1 | 3,500,000 | For controlled cooling |
| Material Handling System | 1 | 4,000,000 | Includes crane & forklift |
| Electrical & Control Panel | 1 | 2,500,000 | PLC controlled |
Total Machinery Cost: ~BDT 59,500,000
6. Raw Material Requirement
Steel billets are the primary raw material. Suppliers in Bangladesh or imports from India, China, or Malaysia are common sources.
| Raw Material | Quantity | Cost per Ton (BDT) | Total Cost (BDT) | Notes |
|---|---|---|---|---|
| Steel Billets | 6,000 | 70,000 | 420,000,000 | Annual requirement |
7. Labor Requirement
A skilled and semi-skilled workforce ensures smooth operations.
| Category | Number | Monthly Salary (BDT) | Annual Cost (BDT) |
|---|---|---|---|
| Mill Operator | 4 | 35,000 | 1,680,000 |
| Welder/Mechanic | 3 | 30,000 | 1,080,000 |
| Laborers | 8 | 20,000 | 1,920,000 |
| Manager | 1 | 60,000 | 720,000 |
| Accountant | 1 | 35,000 | 420,000 |
| Security & Support | 4 | 15,000 | 720,000 |
Total Annual Labor Cost: ~BDT 6,540,000
8. Utilities and Running Costs
Utilities and operational expenses play a key role in profitability.
| Item | Monthly Cost (BDT) | Annual Cost (BDT) | Notes |
|---|---|---|---|
| Electricity | 350,000 | 4,200,000 | Heavy load industry |
| Water & Fuel | 50,000 | 600,000 | Cooling & furnace |
| Maintenance | 75,000 | 900,000 | Machinery upkeep |
| Miscellaneous | 25,000 | 300,000 | Office, admin |
Total Annual Utilities Cost: ~BDT 6,000,000
9. Financial Investment Summary
| Category | Cost (BDT) | Notes |
|---|---|---|
| Land & Building | 21,500,000 | 1.5 acres land + factory |
| Machinery | 59,500,000 | Mill + furnace + auxiliary equipment |
| Raw Materials (annual) | 420,000,000 | Steel billets |
| Labor (annual) | 6,540,000 | Skilled & unskilled |
| Utilities (annual) | 6,000,000 | Electricity, fuel, maintenance |
Total Initial Investment: ~BDT 87,000,000
Annual Running Cost (including raw material): ~BDT 432,540,000
10. Production Cost and Profitability
Let’s calculate approximate revenue and profit.
| Item | Value | Notes |
|---|---|---|
| Production | 6,000 Tons/year | 20 Tons/day |
| Average Selling Price | 85,000 BDT/Ton | TMT Bar Market Rate |
| Annual Revenue | 510,000,000 | 6,000 × 85,000 |
| Total Running Cost | 432,540,000 | Labor + utilities + raw material |
| Annual Profit | 77,460,000 | Revenue – Running Cost |
| ROI | ~18% | Based on initial investment |
This shows a healthy profit margin with scope for expansion. With modern machines, product diversification, and efficient operations, ROI can reach 25%+.
11. Environmental and Regulatory Compliance
- Acquire industrial license and VAT registration
- Comply with Bangladesh Environmental Conservation Rules
- Install emission control equipment for furnace gases
- Ensure waste management for scrap and slag
Proper compliance ensures smooth operations and prevents legal issues.
12. Marketing and Sales Strategy
Most important, a well-planned marketing strategy ensures steady sales:
- Direct sales to construction companies, contractors, and real estate developers
- Long-term contracts with government and infrastructure projects
- Establish distribution networks in major cities (Dhaka, Chattogram, Khulna)
- Digital presence and online ordering for bulk buyers
- Attend trade fairs and exhibitions for exposure
13. SWOT Analysis
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
| High demand in Bangladesh | High initial investment | Export potential | Fluctuating raw material prices |
| Established technology | Skilled labor requirement | Infrastructure projects growth | Competition from large mills |
| Quick ROI | Energy-intensive | Product diversification | Regulatory challenges |
14. Call to Action
We specialize in bankable project profile preparation in Bangladesh and abroad. If you want a detailed, investment-ready project profile for your steel re-rolling mill or any other industrial venture, we can help.
Our services include:
- Complete feasibility study
- Detailed financial projection in BDT or foreign currency
- Machinery and technology recommendation
- Market analysis and sales strategy
- Environmental compliance guide
- Professional, bank-ready project reports
Contact us today to turn your industrial dream into reality and secure financing for your project.