Meghna Re-Rolling & Steel Mills Limited

pending

Meghna Group of Industries (MGI) has diversified business operations across multiple industrial sectors in Bangladesh. As part of its business expansion, Meghna Group is establishing a scrap steel-based, greenfield steel mill and rerolling plant (the Project) with a capacity of 1.4 million metric tonnes of billets per year and rebar capacity of 0.9 million metric tonnes per year in the Cumilla Economic Zone (CuEZ) located in Luterchar union, Meghna Upazila, Cumilla district in Bangladesh. For more information, you can visit https://www.mgi.org/. The proposed IFC investment is for up to US$100 million (“IFC Loans”) to Meghna Re-Rolling and Steel Mills Limited (“MRSML” or the “Company”) in Bangladesh. The financing is proposed to include up to US$46.02 million senior-secured A loan from IFC (the “A Loan”) alongside up to US$53.98 million from Managed Co-Lending Portfolio Program (the “MCPP Loan”). MGI has established MRSML as a new entity for setting up and operating the scrap steel-based steel mill project.The project is being developed on 71 acres of land (23°35'25.10N to 23°34'48.55N and 90°39'1.68E to 90°39'1.64E) located within the larger 246 acre CuEZ industrial land which is concurrently being developed with the project.  This new industrial park is located adjacent to residential and agricultural areas as well as the National Highway 1 (N1), which connects the capital city of Dhaka (35 km from the project site) and the port city of Chittagong (200 km from the project site). A branch of the Meghna River flows along the northern and western boundaries of the project site where a captive wharf is proposed to receive imported steel scrap. M/s Badische Steel Engineering (BSE) (https://www.bse-kehl.de/en#) from Germany has been retained as the project’s detailed engineering consultant as well as to support MRSML during commissioning, operations, and maintenance phase in the first two years. BSE has five decades of experience in operating their own electric steel plants in Europe. M/s Danieli SPA, Italy (https://www.danieli.com/en/) has been retained to supply and establish the greenfield steel milling and rerolling plant.The project includes 1) main production facilities such as scrap steel workshop (open-air storage yard, scrap steel shearing line, and scrap steel room); scrap processing; smelting workshop – 1150 t DC electric arc furnace, 1150t ladle refining furnace; continuous casting workshop; steel rolling workshop; and steel slag processing workshop (30 tons per hour); 2) auxiliary production facilities such as water treatment plant (WTP); fume treatment plant; 10,000 Nm3/hour capacity oxygen and other gas generation plant; air compressor station; machine repair facilities; 3) project associated facility - captive wharf facility for receiving scrap metal and 4) common and shared facilities that will be managed by CuEZ Industrial Authority such as central effluent treatment plant (CETP having 1000 KLD capacity); central Sewage Treatment Plant (CSTP having 720 KLD capacity); 230kV/33kV power grid substation and transmission line; and natural gas station.The project uses electric arc furnace (EAF) technology to melt scrap iron sourced globally from the United States of America (USA), Europe and Middle East through the commodity market. The project will source and use pre-processed heavy melting steel (HMS) grade scrap that meets HMS1 or HMS2 grade specifications of the Institute of Scrap Recycling Industries (ISRI - https://www.isri.org/) - recently renamed as Recycled Materials Association. The project proposes to use a scrap feed ratio of 60% HMS grade scrap and 40% shredded scrap. The scrap steel shall be transferred from larger cargo ships to MGI-owned smaller riverine vessels (barges having a capacity of 1200-4000 MT) in the outer anchorage area of Chattogram Port. The scrap will be transferred at the mid-sea outer anchorage point using crawler-type steel grabbers and transported to captive wharf facility at the project site located at about 220km along the Hatia-Sandeep channel, Meghna River (Chadpur), and Meghna River sub-branches. The project design also includes an on-site scrap processing and cleaning facility to remove non-ferrous materials designed by M/s Vezzani SpA (https://www.vezzani.biz/) to handle any unprocessed scrap received on-site. The captive wharf facility is an associated facility of the project and is located within the project site on its northern boundary. The wharf is designed to have two berths approximately 200 m long and 16 m wide. The design of both the project site development and the wharf facility have integrated the outcomes of flood risk assessment using 100-year historical flood data. As stated above, the project will use common industrial utilities of the CuEZ, which is currently under construction, such as central sewage treatment plant, central effluent treatment plant (CETP), natural gas pipeline, power transmission line and substation. The electric supply shall be grid-sourced through Cumilla Economic Zone substation. The natural gas will be sourced from government-owned Titas Gas Transmission and Distribution Company through a 600 m pipeline laid by the utility provider from the nearest natural gas station within CuEZ. The project development will also include a multi-storied (ground and 10 floors above) administrative and accommodation building (approximately 1000 staff capacity) which will be shared with other MGI companies that will be operating in the CuEZ.  There are several existing industrial areas within 5km of the site, but these are more aggregated on the other side of the river. The CuEZ shall house several other industries, including MGI’s glass industry which is presently under construction. The construction phase of the project has commenced since July 2023, and the plant is expected to be fully commissioned by July 2026. MRSML is managing the ongoing civil construction through multiple construction contractors based on detailed construction drawings provided by Danieli.