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Published : 08 Jun 2026, 01:35 AM
Bangladesh’s steel industry is now grappling with a stark question of survival as prolonged losses deepen under the pressure of high interest rates, rising energy costs and currency depreciation, according to Maruf Mohsin, executive director of Rahim Group.
He warned that fresh electricity price hikes, combined with earlier increases in gas and dollar costs, are set to further squeeze an industry already under strain for nearly a year and a half.
While companies continue to absorb losses, he cautioned that sustained pressure could eventually be passed on to consumers.
“If the government takes some policy measures to increase consumers’ purchasing power, that would be better for everyone. In the end, all will benefit,” he said.
Maruf, also vice-president of the Bangladesh Steel Manufacturers Association, spoke in an interview on bdnews24.com’s discussion programme “Chinwag with the Chiefs”, where he discussed the steel sector, construction industry, broader business conditions and the state of the economy.
The interview was broadcast on bdnews24.com’s YouTube channel and Facebook page.
He also reflected on Rahim Group’s business strategy, operational challenges and long-term priorities, saying the group was attempting to sustain operations despite mounting losses.
“We are incurring losses. But even within that, Rahim Group, one of the major industrial groups in the sector, is trying to keep going. Because the economy itself must survive, otherwise the whole system will collapse,” he said.
Describing the industry’s condition over the past 18 months, he said steel producers had effectively moved into a “loss-leader” phase, where survival rather than profit has become the central concern.
“For the last one and a half years, business has not been in a good state. We have been making losses continuously and have now reached a point where it is about who can absorb more losses. Still, we are trying to operate in a manageable way because the economy has to stay afloat,” he said.
He added that some support had been received in the past and expressed hope for continued assistance.
He also stressed the importance of protecting import-substitution industries such as ferroalloy production, which he described as vital to reducing reliance on foreign goods.
“If we can protect industries like ferroalloy, then domestic production will stay in the country,” he said.
Maruf noted that there had been expectations of improved market conditions ahead of the election, driven by hopes for a stable elected government.
“We were somewhat optimistic before the election that the market would expand. That was our expectation. And, praise be to God, some progress has been made, and we expect more ahead,” he said.
Explaining the structural pressures facing the sector, he said steel production depends heavily on electricity, gas and working capital.
“Steel itself is a major challenge. The industry needs electricity, gas and money -- the three most critical inputs,” he said.
He said rising import costs of scrap due to higher dollar prices, alongside increasing gas tariffs over the past one and a half years, had significantly increased production costs.
Further hikes, he warned, would be difficult for the industry to absorb.
“The biggest impact is coming from electricity. Costs have already increased by around Tk 2,000 to Tk 4,000 per tonne depending on capacity,” he said.
Maruf added that the sector’s challenges would be raised directly with BNP acting chairman Tarique Rahman in a forthcoming meeting.
Linking steel demand to broader economic activity, he said declining investment in construction and real estate had directly weakened consumption.
“When sales drop, purchases drop. Without support from the backend, demand cannot rise. Policies must be introduced, economic reforms are needed, interest rates must be reviewed, VAT and taxes must be reconsidered,” he said.
He said the group was also working internally to reduce costs without compromising product quality.
“The first priority is quality. We do not compromise on that. At the same time, at the top management level, we sometimes reduce profit margins and dividends so that consumers can benefit,” he said.
Looking ahead, he urged the government to consider lowering VAT to support both industry and revenue growth.
“If VAT rates are reduced, we will be able to increase government revenue,” he said.
Tracing the legacy of Rahim Group, founded by his grandfather and father, Maruf said its guiding principle had always been product quality and financial integrity.
“The second priority is always: pay your debt. That was my grandfather’s philosophy, my father’s philosophy, and mine as well. Even if it costs everything, if we owe someone, we will pay it. That is our principle, and we follow Islamic values in all our operations,” he said.
