SS Steel Limited, a reputed steel manufacturer in Bangladesh, aims to strengthen its footprints through strategic acquisitions and pursuing global best practices.
The 22-year-old steelmaker has strategically utilised the power of acquisition and merger (M&A) for sustainable business growth and enhancing competitive edge.
In recent years, the company has undertaken a number of M&A deals and done BMRE (Balancing, Modernisation, Rehabilitation and Expansion) of each plant, hence reviving the underperforming units as profitable concerns and contributing to new job creation.
In modern business, companies have to continue creating value to sustain. In this case, M&A can create substantial value through the consolidation of their resources in a non-zero sum game. In an acquisition, the buyer may enhance revenue growth, reduce costs of operation, and create synergies.
As part of its expansion plan, in August 2020, the company acquired the Chattogram based-Saleh Steel Industries. After that, they have streamlined the operation of Saleh Steel and enhanced its production capacity.
In March 2022, the publicly traded company made another acquisition. They acquired Al-Falah Steel & Re-Rolling Mills while the factory was almost closed. After buying equity shares, SS Steel has taken the initiative to increase the production of the Al-Falah Steel, a Narayangonj-based steel plant.
SS Steel Limited, which started its journey in 2001, is producing MS billet and MS rod from raw material scrap to finished goods. Over the years, this company’s products have been chosen solely for building major national landmarks and infrastructures.
Recently, the company has also taken over fixed assets and operations of Peninsula and Super Steel Mills for increasing production capacity.
To cut project implementation time and costs, entrepreneurs now prefer to buy out existing sick or underperforming companies rather than start from the ground up.
Building a new company from the ground up means securing permission from various regulatory authorities, erecting structures, importing machinery and uncertainty over FX exchange rate, then starting its operation, which is very costly and time-consuming, said Javed Opgenhaffen, Chairman of SS Steel Limited.
In case of M&A, companies can gain a competitive edge as they can quickly operationalise the plant and create value for the company, customers and investors, he added.
Javed Opgenhaffen, who graduated in management from Queen Mary, University of London, and in Employment relations from London School of Economics and Political Science, also emphasises on continuous improvement with adopting best global practices.
“SS Steel always looks for new ways, makes the effort and takes the initiatives to adopt those into business processes and deliver the best products at consumers’ door,” he said.
Moreover, technology also plays a vital role for each and every type of business. Better technology can increase productivity and reduce costs of production.
“We are using the latest induction furnace technology in our plant because the induction furnace is a clean, energy-efficient and well controllable melting process compared to most other means of metal melting,” said Javed Opgenhaffen, who is also the Chairman of Saleh Steel Industries.
SS Steel and its related steel manufacturing units, which now employs around 1,750 people, is not only involved in MS billet and MS rod production but also MS billet and MS Rod distribution and supply right up to their customer doorstep.
Located in Tongi on the outskirts of Dhaka, the company sells its products by its renowned brand name such as SS Tiger B400 DWR/60G TMT bar and SS Tiger B500 CWR TMT bar.
At present, total combined capacity of SS Steel, Saleh Steel, Al-Falah Steel, Peninsula & Super Steel is around 500,000 tonne MS rod per year.
SS Steel and its related steel manufacturing concerns now have a combined annual turnover of around Tk 2,150 crore and it is expected to reach Tk 3,000 crore within the next financial year. Since its enlistment on both Dhaka and Chittagong stock exchanges in 2019, the company has been providing regular dividends to its investors.
