Steel building makers get more time to clear import payments

Bangladesh Bank yesterday announced that makers of prefabricated steel structures will now have almost a year to clear their letters of credit for raw material imports in a bid to facilitate growth in the industry.

Previously, payments for raw materials sourced from foreign manufacturers could be deferred for up to 180 days but the central bank decided to enhance the usance period to 360 days after prefabricated building makers urged it to reduce their cost of doing business.

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"Our cost of doing business will reduce as a result of this decision," said Jowher Rizvi, president of the Steel Building Manufacturers Association of Bangladesh (SBMAB).

"In the past, we had to pay for our imports even before receiving payment from our buyers," he added.

The association, which represents 32 factories operating in Bangladesh, demanded additional time for making import payments about two years ago, after which Bangladesh Bank formed a committee for its recommendation in this regard.

Rizvi went on to say that they need up to one year to complete construction on building using prefabricated steel.

"We are very grateful to the central bank for understanding the nature of the industry and its production cycle," he said.

Bangladesh currently needs 3 lakh tonnes of prefabricated steel each year and local companies supply 90 per cent of this requirement while the rest is met through imports, according to industry insiders.

The domestic market for prefabricated steel is currently worth around Tk 4,000 crore while it was valued at Tk 2,000 crore in 2010, shows data from the SBMAB.