The expansion of Pakistan Steel attaining 3 million tons per year production capacity has become possible because of improved operational and financial efficiency, Pakistan Steel sources said here on Tuesday.
A meeting here presided over by Federal Minister for Industries, Production and Special Initiatives, Jahangir Khan Tareen, reviewed the performance of Pakistan Steel.
The Pakistan Steel Chairman Abdul Qayum gave a detailed presentation and highlighted the concept of corporate strategies to achieve positive results and control prices of steel and steel products which remain bullish in the international market.
The Minister advised Pakistan Steel to explore iron ore at Chinniot for using it in Pakistan Steel. He also asked PS to mobilise individual companies who are interested in investing in this sector.
In their briefing, officials of PS said that the financial health of Pakistan Steel was excellent.
They said that through financial restructuring PS was able to pay off the principal amount of Rs 11.35 billion by the end of year 2002-03 out of the accumulated long term liabilities of commercial banks nine years ahead of schedule.
Net sales during 2002-03 were Rs 22084 million whereas net sales up to July 2004 were Rs 27304 million, which showed an increase of 33 percent. The profit for 2002-03 was only Rs 1023.988 million whereas it earned Rs 7019.260 million as profit up to July 2004.
They said that PS has received proposals for expansion of the mills from China and Russia which have rich experience in steel manufacturing.
The PS has approached Corus Consulting Ltd of UK for provision of consultancy services for modernisation and expansion of Pakistan Steel to 3 million tons per year capacity at a cost of $541,044. The consultants have commenced the work.
The officials said that PS has taken measures for stabilisation of steel prices, which include no duty on raw materials of Pak Steel ie iron ore; duty on iron and steel scrap reduced from 20-10 percent to 5 percent; duty on ships for scrapping reduced from 10 percent to 5 percent; duty on billets reduced from 20-10 percent to 5 percent.
They said that prices of steel and steel products rose last year due to huge development work in China which included construction of Olympic stadiums, dams, skyscrapers and steel demand of other rapidly developing countries.
This resulted in the world-wide depletion of reserve stocks (by about 15 million tons) and subsequent shortfall of raw materials at various steel works around the world.
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