The Daily Star reported that Japan's Nippon Steel and Sumitomo Metal Corporation is set to inaugurate a factory in Bangladesh this month in a bid to grab the growing domestic market.

The factory, located in Chittagong, is being built under a 50-50 JV inked in December 2013 with the local McDonald Steel Building Products Limited.

Mr Mazumder Sunil Chandra MD of the newly formed company, said that the factory will supply materials mainly for the steel building, shipbuilding and construction companies.

Nippon and McDonald Steel Industries Limited is targeting mid September to start commercial production at the factory, whose initial annual capacity would be 15,000 tonnes.

The two companies have so far invested around Tk 7 crore for the project, he said, adding that initiative will ensure higher quality products at lower price.

Japan's top steelmaker's decision to enter the market comes at a time when garment factory owners are turning to locally assembled pre fabricated steel buildings for relocating their faulty factories.

According to industry insiders, presently, the country's annual demand for pre fabricated steel buildings is around Tk 2,000 crore and it has been growing at more than 35 percent for the last several years.

Mr Sunil Chandra said that the country has a growing steel sector but almost every company has to import steel, which is a costly and time-consuming process. Imagine getting the same products at affordable prices and without getting into any of the import stage hassles our factory will make that possible.

He said that the plant will process an array of steel products such as electrical sheets, tin plates, pipes and tubes, rods and bars, coking coal, pig iron, Ferro alloys, slag and steel machinery. The products will be delivered directly from the factory in Japan and processed into ordered specifications in the Chittagong factory and transported to the customers.