Prefabricated Steel Could Cut Construction Costs, Curb Import Dependence

Bangladesh could significantly reduce construction costs and curb its dependence on imported building materials by developing a stronger prefabricated steel ecosystem, according to Fatema Rizvi, Executive Director of PEB Steel Alliance Ltd (PEBSAL).

“The wider prefabricated steel ecosystem could be worth at least Tk15,000 crore. However, further research is needed to establish a precise and verified industry figure,” she said in an interview with The Daily Observer.

Rizvi said the prefabricated steel industry has substantial growth potential, but rising production costs, heavy dependence on imported raw materials, inadequate export facilities and the absence of a comprehensive policy framework are holding the sector back.

She called for a level playing field for domestic manufacturers, saying rationalisation of duties, bonded warehouse facilities, export incentives, technology development, research and skills training would be critical to making the industry more competitive.

“If the government and industry can work together on duties, bonded facilities, exports, technology and skills, prefabricated steel can become an important contributor to Bangladesh’s industrialisation, employment and export growth,” she said.


Its business remains heavily concentrated in the industrial segment, which accounts for about 80 per cent of turnover, while commercial projects contribute 15 per cent and residential projects around 5 per cent.

Rizvi sees considerable scope for expansion in the residential market as Bangladesh’s urbanisation and construction requirements evolve.

Prefabricated steel structures, she said, offer several advantages over conventional construction. They can be dismantled and reused and, when properly engineered, can provide strong earthquake resistance. Their applications can extend beyond factories and warehouses to homes, commercial buildings, bridges, monuments and other urban infrastructure.

“As Bangladesh becomes more developed, we will need structures that are functional, modern and attractive,” she said, adding that prefabricated steel could play an important role in that transformation.

Although the sector may not become one of the country’s largest economic drivers, Rizvi said it could make a meaningful contribution through industrial employment, technology development and export diversification, particularly by creating opportunities for Bangladesh’s large young workforce.

She also highlighted the scope for greater participation of women in steel manufacturing as automation reduces dependence on physically intensive work.

During a recent visit to China, Rizvi said she saw highly automated factories where women were employed in production areas that had traditionally been considered physically demanding.

Bangladesh could draw lessons from the evolution of the garment industry, she said, noting that the RMG sector did not become a major economic force overnight.

Government and industry support helped develop skills, market awareness and export capacity in garments. The prefabricated steel sector could follow its own development path through sustained investment in research, training and education, she said.

Rizvi proposed closer collaboration between industry and institutions such as BUET and MIST to strengthen engineering capabilities, technological innovation and skills development.

She also said export opportunities for Bangladeshi prefabricated steel manufacturers were already becoming a reality rather than a distant prospect.

Bangladeshi manufacturers now have modern production facilities and are capable of producing structures to international standards, she said.

PEBSAL, for instance, has supplied products for UN peacekeeping-related requirements in Africa and undertaken projects in Pakistan. The company has also begun work this year on a recreational sports hall in Guyana, marking another step into overseas markets.

However, stronger export incentives, technology, skilled manpower and a supportive policy environment will be necessary if Bangladesh is to emerge as a competitive international supplier of prefabricated steel structures, Rizvi said.

The sector is expanding, but reliable industry-wide statistics remain limited. The relevant association has around 40 members, while a large number of smaller fabricators operate outside the organisation.
“This is why we need more comprehensive data before making precise claims about the size and performance of the industry,” she said.

PEBSAL’s own turnover rose from approximately Tk280 crore in the previous fiscal year to Tk380 crore in the last fiscal year, representing growth of around 36 per cent.

One of the most significant developments, she said, has been the entry of local manufacturers into the bridge segment.

Bangladesh once relied heavily on imported prefabricated bridge structures, but domestic companies are increasingly undertaking large-span bridge and composite steel projects. The shift indicates that local manufacturers are moving into higher-value segments that were previously more dependent on imports.

Yet manufacturers remain heavily reliant on imported steel plates, accessories and other raw materials.

Rizvi said the tariff structure has a direct bearing on production costs, although the actual impact varies according to HS codes, product specifications and applicable statutory regulatory orders.

“The duty structure needs to be examined product by product rather than through a single duty rate for the entire industry,” she said.

She also urged the government to introduce bonded warehouse facilities for genuine export-oriented manufacturers, saying delays in duty drawback were creating a significant financing burden.

“Duty drawback can take six to 12 months. A proper bonded facility would improve manufacturers’ cash flow and strengthen their export competitiveness,” she said.

Rizvi urged the government to consider prefabricated steel a thrust sector and formulate a clear policy framework in consultation with industry stakeholders.

She acknowledged some recent progress, including measures taken by the National Board of Revenue concerning prefabricated building-structure industries and an amended SRO issued in June 2025.

But, she said, the industry needs a broader framework covering duties, exports, bonded facilities, technology, research and skills development.

“If the sector gets even a fraction of the policy support that helped the garment industry grow, I believe it can expand much faster,” Rizvi said.

She stressed that the industry was not opposed to legitimate investment incentives or facilities designed to encourage industrialisation. The key concern, she said, was ensuring a level playing field between domestic manufacturers and imported prefabricated structures.

Under the existing tariff structure, some categories of prefabricated buildings face a substantial tax incidence. When projects receive special duty-free treatment for imported buildings or steel materials, local manufacturers can consequently face a significant cost disadvantage.

Rizvi said industry assessments had identified cases in which a project requiring around 2,000 tonnes of steel could potentially import about 4,000 tonnes.

If surplus materials subsequently enter the domestic market, she said, they could gain an unfair cost advantage over local manufacturers that pay duties on imported inputs.

The association has raised the issue with the NBR chairman, who, according to Rizvi, was receptive and asked the industry body to submit the matter in writing.

The industry’s position, she said, is that genuine project requirements should receive government support, but clear criteria are needed to determine what constitutes a genuine requirement and prevent misuse of duty-free facilities.

“A coordinated approach by the government and industry on duties, bonded facilities, exports, technology and skills can help the prefabricated steel sector expand its contribution to industrialisation, employment and exports,” Rizvi said.