RSRM set to resume production this month

Ratanpur Steel Re-Rolling Mills (RSRM) Limited is going to resume its steel production within this month, according to company sources.

RSRM Director Marzanur Rahman declined to comment on the production resumption date, but did confirm that their plants in Chattogram have got the "electricity connection restored," as the company regularised its Tk40 crore arrear bills paying Tk10 crore and the rest to be paid in instalments. 

One of his employees, however, told The Business Standard, "Everything is ready within the plant and we are going to begin production before this month ends."

Bangladesh Power Development Board (BPDB) had cut RSRM's electricity connection nine months ago due to its failure to pay the instalments of arrear bills.

RSRM Group's excessive bank liability totalling around Tk2,200 crore under its four companies and tassel with lenders regarding paying instalments were the main reason behind the company's sorry state.

TBS earlier in April this year found and reported that the RSRM Group plants were shuttered and its employees remained unpaid.

RSRM Limited, however, did not announce the factory closure over the last nine months as it was price-sensitive information.

However, in the financial statement for January 2021-March 2021, it posted zero revenue.

Against its July 2020-December 2020 revenue of Tk120 crore, the listed company had incurred Tk21.7 crore in losses which amounted to Tk29.25 crore in the first nine months of the 2020-21 fiscal year as fixed costs still continued despite no revenue.

For the quarterly losses, RSRM rather blamed only the pandemic, which "reduced production and sales".

It also blamed the high cost of raw materials purchased from local sources.

Founded in 1984, Ratanpur Group has established itself as one of the leading steel companies based in Chattogram. The industrial group once had an annual turnover of around Tk700 crore.

One of its non-listed companies, Ratanpur Ship Recycling Industries enabled the group to source scraps from its own shipbreaking yard, while Modern Steel Mills was founded to make billets out of scrap metals to cater the construction rod plant owned by the listed company.

Modern Steel Mills failed to get listed into the stock exchange due to its high debt burden, while the Bangladesh Securities and Exchange Commission also rejected the already listed company's right share issuance plan.

In 2014, RSRM Ltd was listed in the bourses, and according to Dhaka Stock Exchange (DSE) the company has its short term loans of Tk87 crore while the long term loans total to over Tk91 crore.

Meanwhile, RSRM stocks gained by 36% in the first nine months of the year to close at Tk33.5 on Tuesday in the DSE.

Its shares began to fall from over Tk95 in 2017 and went below Tk20 earlier this year.