07 June 2004 07:54
Pakistan Steel to earn Rs 5 billion record profit this year
Karachi, June 07 PPI: Pakistan Steel Mill, country's largest engineering concern, having annual production of
1.1 million tons will earn "record profit" of Rs 5 billion this year, following "unprecedented"
sales of Rs 25 billion and plans to increase its annual production capacity to 3.3 million tons in next four years at
cost of US$ 800 million. Stating this Chairman Pakistan Steel Lt. General Abdul Qayyum (retd) said the Mill (set up 25
years back in Karachi with help of former Soviet Union), was running in "colossal losses of Rs 19 billion for past
many years due to political interference by previous governments", started making profit in last two years as a
result of "corrective measures for restructuring" taken by President Pervez Musharraf. He told radio press
conference that economic and industrial growth in the country in last few years led to turnaround of Pakistan Steel,
which enabled clearing Rs 12 billion bank loans. However, Rs 7 billion interest on these loans was still to be paid. The
Mill's cumulative losses of Rs 7.5 billion will be wiped out in one year, he added. "Our financial position is
very good with equity of Rs 7 billion this year." He said currently revamping, overhauling and maintenance of Steel
Mill was underway to increase annual production to 1.5 million tons. Capital repair of siltering plant was completed.
Recently scrap steel was disposed off for Rs 1.6 billion by transparent tender. Lt. General Qayyum said MoU was signed
with Russia, framework agreement with China and talks with Ukraine on increasing annual production of Mill to 3.3
million tons. The final decision on production expansion will be taken after evaluating aid, interest free or less
interest loan from Pakistani banks and technical offers from these countries, he stated. He said international
consultants were also being appointed to prepare bankable technical feasibility for expansion and diversification of
production at the Mill. Lt. General Abdul Qayyum said Steel Mill with 13000 staff plus 1800 on daily wages, was geared
to meet challenges of future including World Trade Organization WTO regime from January 2005, through cost
effectiveness. price competitiveness and acquiring raw material like iron ore locally. About 400 engineers were inducted
recently under policy of rationalization of manpower. "WTO regime is bad for developing states as it will be
difficult for them to comepete with developed countries", Chairman Pakistan Steel contended. He said new dealership
has been freezed at the Mill in order to check corruption. "Our tendering system is being made transparent
according to World Bank's standards. Cost of our products is less than landed price of those imported."
Answering a question, he blamed hoarders for creating crisis in the country by artificial price increase of steel
billets in past few months. According to him the situation was now under control and products being sold at Rs 38000 to
Rs 40000 per ton today. He said Pakistan Steel's share in domestic industry was 25%, while the rest met by scrap
and imported products. He said a leading Saudi group would set up billets plant in vicinity of Steel Mill with
investment of $100 million, which will exclusively for export.
(THROUGH ASIA PULSE)
[Pakistan Press International Information Services Limited] |
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