Pakistan Steel on the Path of Revival

Pakistan steel has an installed capacity of producing 1.1 Mtpy of raw steel for which 1,166,000 Mtn of Hot Metal (Pig Iron) is required. The benefits accruing from Pakistan Steel’s performance and profitability are not confined only to this organization but its affects the entire economy of the country. The country’s biggest public sector industry – Pakistan Steel – has been the subject of much concern and comment for the last two or three years by a vast segment of our intelligentsia, including some opinion makers for its slide into a heavy loss-making enterprise. Due to worldwide economic recession, Pakistan Steel also faced its consequences.

The Management, Experienced Engineers and its Skilled Workers are toiling together for the rapid revival of Pakistan Steel. Efforts are underway for which current financial package by the Present Government and the imposition of 12.5% regulatory duty on the import of Hot Rolled (HR) products is a step forward.

Some of the encouraging sign posts can be briefly stated. In April, 2014 when the bailout package was approved Pakistan Steel was producing at mere 1.4% of Capacity Utilization (CAPU) which has now been recorded as 42% CAPU. Rs. 18.5 billion of financial package was divided into parts for which Rs. 9 billion were kept for the procurement of raw material (i.e. iron ore and metallurgical coal) due to which Pakistan Steel has sufficient quantities of raw material in stock. The remaining Rs. 9.5 billion were for disbursement of delayed salaries from February, 2014, for payment of Utility bills (gas, electricity, water and fuel), for payment of spares and stores procured and for gratuity and provident fund for the retired employees.

It is imperative to mention here that despite delays in the release of bailout installments a continuous supply chain of raw material was maintained and production reached at 42% and still going upwards. Repair and maintenance work of the grossly neglected plant were undertaken after the lapse of 6 years, which who know the plant consider it a ‘miracle’. Fresh talent has been acquired from all over the country on merit. Finished products of international quality worth billions of rupees are ready for sale. Last but not the least Pakistan Steel has motivated workforce.

The present government keeping in view the challenges faced by Pakistan Steel on 23rd April, 2015 in its meeting of Economic Coordination Committee (ECC) announced two months’ salary for the employees of Pakistan Steel, which is a good omen. Moreover, it was decided that business plan may be presented to put Pakistan Steel on sustainable path for which a financial package may be approved. It is pertinent to mention here that efforts are underway to formulate such plan for the revival of the only steel industry in Pakistan.

By Shazim Akhtar

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