Chinese steel giant Kunming Iron & Steel Holding Company (KISC) is set to enter Bangladesh with an investment of $2.13 billion, aiming to get a slice of the growing local steel market.

Bangladesh Economic Zones Authority and Yunnan Yongle Overseas Investment Co Ltd, a subsidiary of KISC, signed an agreement yesterday for the proposed Bangladesh-China Iron and Steel International Capacity Cooperation Demonstrative Zone.

The proposed steel plant may be established either in Mirsarai Economic Zone or Maheshkhali of Chittagong on 1,000 acres of land if the agreement goes through, said Abdul Matlub Ahmad, chairman of Star Infrastructure Development Consortium Ltd.

Star Consortium is a new company floated by 17 local entrepreneurs, said Ahmad, adding that the consortium will enjoy 30 percent stake in the proposed steel company.

The KISC has already started the six-months long feasibility study for establishing the joint venture company, Ahmad said.

“We are expecting to start production of steel billets in the mill within the next three years as we are now continuing a feasibility study for the company,” he said.

“We have a target to produce 2 million tonnes of integrated iron and steel products in a year. Our target customers are local steel mills and we will also be exporting goods to some neighbouring countries,” he added.

Ahmad said at least 10,000 workers would be directly employed and another 15,000 indirectly.

“Bangladesh is a growing economy and the consumption of steel and iron in this country is on the rise. So the foreign companies have targeted to grab this promising domestic market,” Ahmad said. Currently almost all the requirements are met through import, he said.

Talking to The Daily Star, Paban Chowdhury, executive chairman of BEZA, said the company could be awarded 1,000 acres of land either in Mirsarai or in Maheshkhali. “We do not have any problem of land. We can fulfil their demand,” Chowdhury said.

During Chinese President Xi Jinping's visit to Bangladesh last year, 13 Bangladeshi entities signed joint venture agreements with Chinese companies, involving $13.6 billion.