Pakistan Steel-line Pipe Industry Association (PSPA) has rejected the proposed imposition of regulatory duty at the rate of 15 percent on all flat rolled products which are used as raw material for manufactures of steel welded pipes.
Pakistan Steel-line Pipe Industry Association (PSPA, Muhammad Usman, said at a press conference here on Sunday that Pakistan Steel Mills had admitted several times that it could meet only 20 percent of the country's steel demand and the remaining 80 percent was being imported. Members of the Pakistan Steel Line Pipe Industry Association and also other manufacturers of pipes import 75 percent of the flat rolled products and 70 percent of flat rolled products produced by PSM are being lifted by the pipe manufacturers and as such they were the biggest stakeholders of the flat rolled products in Pakistan.
He said that the number of industries involved in steel pipe manufacturing was more than 100. Total investment of this sector was around Rs 40 billion. He said consumption of flat rolled products by pipe manufacturer is about 70,00,00 tons in Pakistan. Export of pipes to the tune of Rs 6 billion was also being made by manufacturers of pipes presently and there is a great scope for its enhancement. He said there is a 10,000-strong labour force involved in this sector and 40,000 labour force in the allied industry.
He said that recently China had announced 15 percent export rebate on steel pipes and for HR flat products no export rebate was applicable. C&F Karachi port prices of steel pipes and flat products, offered by China, are the same, he added.
He said since there is 10 percent import duty on flat products and 15 percent on steel pipes, so the imposition of 15 percent RD would increase the raw material duty from 10 percent to 25 percent and for the steel pipes it would remain 15 percent. So the steel pipe industry would not be able to continue their production.
He said that such step to impose RD was being taken to protect Pakistan Steel Mills only, without taking into consideration the disastrous effects which the pipe manufacturers would suffer.
The Pakistan Steel Mills was making huge profits in the previous 3 years but was now suffering losses due to poor governance, mismanagement and without the proper planning for making purchases of raw material. Similarly, production plans were wrongly made. Decisions were not taken at the proper time which gave rise to lot of malpractice and corruption with the result that PSM was suffering losses and now wanted to cover these by selling goods at higher price, he added.
He said that the international market of HR coils was now at $400 C&F Karachi which comes to Rs 32,000 without the addition of customs duties, sales and other taxes, whereas the sale price of Pakistan Steel Mill was Rs 47,500 without additional taxes. If taxes were added the price would be much more. This clearly indicates that PSM is not following proper policies to compete with international prices, he said.
Further he pointed that APSM was the only manufacturer of flat rolled products in Pakistan and after imposing the RD the import would not be feasible any more and PSM would have a monopoly to set any price and this would result in corruption and inflation for the masses.
He said it had been an inalienable and individual policy of Pakistan to assist the development of nascent engineering industry in Pakistan. In view of this policy, the Federal Government had already exempted customs duties in excess of 5 percent on HR coils, under Serial No-88 of SRO. 565(I)/2006 dated 05.06.2006, provided that such raw materials were not manufactured locally. It was submitted that the purpose of building tariff barriers, through the instrument of regulatory duty was invariably to afford protection to the local industry. Accordingly, regulatory duty should not be levied on such HR coils as were not manufactured locally.
He said that it was needless to recapitulate that the engineering industry was now the stepping stone to achieve industrial excellence, wherever progress in the industrial field was desired by any Government. He said that the industry has great faith and confidence that the government would not succumb to the proposal of some interested local parties to hit the engineering industry at its very roots.
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