Steelmakers yesterday demanded Tk 3,000 crore working capital at low interest from the government-announced stimulus package such that they can make up for the losses caused by the pandemic.

During March-April, the industry faced a net loss of Tk 3,000 crore as sales were insignificant while the manufacturers had to pay staff salaries and bear other expenditures, said Manwar Hossain, chairman of Bangladesh Steel Manufacturers Association (BSMA).

"We are bracing for massive losses as the pandemic has disrupted import of raw materials and production, which will take a toll on infrastructure development," Hossain said at a virtual press conference where he also talked about tax and VAT issues.

As much as 90 per cent of the raw materials are imported from the US, Canada, Italy, the UK and Australia, which have gone into partial or full lockdown since the beginning of March to contain the spread of the novel coronavirus.

"The lockdown in those countries are unlikely to be lifted soon," said Hossain, also the managing director of Anwar Group of Industries that owns Anwar Ispat.

If the situation goes on like this until December, the losses will run into Tk 15,000 crore, he said, adding that steel manufacturers are also unable to bring in spare parts or capital machinery as economic activities have come to a standstill around the world.

"The sector would need around two years to recoup the present losses."

Regarding the stimulus package, he said some banks are showing a positive response but most of the lenders are giving them a wide berth.

"We are not seeking donation -- we are asking for low-cost loans to fight the ongoing crisis," Hossain said.

Banks can extend the tenure of payment for letters of credit by an additional six months without the need for taking prior permission from the central bank, he said, while calling for a fund for short-term loans against LCs.

In the past few years the country saw a good number of new steel and re-rolling mills that use state-of-the-art technologies and churn out world-class products, said Md Shahidullah, secretary general of the BSMA.

He demanded low-interest loans for 12 years with a grace period of six years to help them iron out the hitches brought about by the pandemic.

The association called for reducing customs duty to Tk 500 from existing Tk 1,500 for importing each tonne of melting scrap and imposing a 15 per cent supplementary duty on import of finished MS rod.

The BSMA also demanded reduction of corporate tax to 10 per cent from 35 per cent now and withdrawal of 5 per cent advance income tax at the import stage for the next fiscal year.

The steel industry is now worth Tk 50,000 crore and the country has about 40 active steel makers, who altogether can manufacture nine million tonnes of steel a year.