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'Pakistan Steel production capacity to be expanded'

KARACHI: The Chairman and Managing Director Pakistan Steel, Lt. Col. Mohammed Afzal Khan (Rtd) has given an indication about some headway to be made in connection with the proposed expansion of Pakistan Steel.

Addressing a radio news conference Col. Afzal said that both the chief executive as well as the federal production minister have agreed to the need for Pakistan Steel expansion from existing 1.1 million tonnes to 3.1 million tonnes capacity.

He was confident that with realisation of the need for expansion of Pakistan Steel, the present government will certainly pay attention on it.

He pointed out that wherever in the world a steel making plant was established it started with a 1.1 million tonnes capacity which in its initial shape is considered of sub-economic level and non-viable.

Col. Khan said the plants set up in Iran, Korea, India, Egypt, Finland and Turkey with the cooperation of former Soviet Union, have all been expanded to a capacity of three million tonnes or above.

However, it was unfortunate that Pakistan's this lone steel plant remained unexpanded for negligence of which the previous managements are responsible. But more responsibility lies on political governments which did not pay attention on this important aspect and as a result the much desired expansion could not take place.

To a question the chairman said that if work on plan expansion is taken in hand, it would take 4-5 years to complete.

He said Pakistan Steel fulfils the country's 30 percent steel requirement. Last year the mill achieved 76 percent production of designed capacity as against 77 percent a year before. The mill started showing improvement in the beginning of the 1999 and attained a production of 83 percent during July-September, over 87 percent in October, 96 percent in November, over 88 percent in December and it was expected at 90 percent in January 2000.

Col. Afzal said that steel utilisation in Pakistan was growing at 7 percent per annum and if appropriate steps are not taken right now to meet the growing demand, the country will have to spend huge foreign exchange on its import in the coming years.

He said the mill which was completed in 1985 with the sole objective of promoting the country's engineering sector, met this challenge very well and so far 32 down stream units have been established in the private sector whereas 10 more were in the completion stage.

He pointed out that Pakistan Steel, which had cost Rs 25 billion, does not take any money from the government. On the contrary it has so far deposited Rs 30 billion to the government exchequer.

He said Pakistan Steel has so far saved Rs 3 billion which, otherwise, would have been spent on steel imports. He said the cost on the setting up of a steel mill of the size of this mill today cost Rs 200 billion.

He informed that Pakistan Steel earned an operational profit of Rs 600 million last year.

He said that Pakistan Steel can be relieved of its financial over-burdening, if its debt of Rs 19 billion is frozen at June 30, 1999. He said Pakistan Steel should be given a two-year moratorium after which the outstanding loan be recovered from it in instalments beginning from year 2001.ÑAPP