Pakistan Steel production cycle comes to a halt

[Gessler]

ISLAMABAD: The production cycle at the Pakistan Steel Mills — the country’s
largest industrial complex — appears to have come to a halt, mainly because
of non-availability of raw material and severe financial crunch.

According to a PSM executive, two major production units of coke oven
byproduct plant (COBP) and blast furnace are facing acute raw material shortage
and second battery has been shifted to heat cycle due to shortage of coal
feedstock.

Non-availability of coke to charge the blast furnace will adversely affect
productivity of hot metal required to feed the steel-making unit which caters
to the rolling mills to make value-added products. “This is going to further
damage the condition of batteries and their production parameters.”

He said the first COBP battery had already been on heating since November
2010 without production, incurring millions of rupees per month.

In the first half of this month, the production of coke oven battery stood at
just 5,000 tons against its capacity of 80,000 tons per month. Total coal
stock now stands at 800 tons against the minimum requirement of 300,000
tons of ready stock under standard operating procedures.

As a consequence, the production of blast furnace stood at 6,000 tons
against its monthly capacity of 100,000 tons, due to coke shortage.

Raw steel production stood at about 4,500 tons against the monthly
capacity of 91,000 tons.

There is no production of hot strip mill. The billet mill has been closed for
the past four years and the billet caster has been out of order for more
than three and a half years.

The cold rolling mill’s production was 1,200 tons against the monthly
capacity of about 17,000 tons.

Total sales in the last 15 days amounted to a negligible Rs440 million.

“As of today, we neither have any raw material inventory nor saleable stock.
Practically, the PSM stands closed even though its major batteries are kept
on heating to avoid a technical closure – a stage when the mills cannot be
revived,” the official said.

He said the government during its first 100 days had neither inducted a
professional management nor changed the board of directors in a transparent
manner to take steps to revive the mills that catered to the country’s
steel industry.

Officials said the backbone of steel industry was on the verge of collapse
and yet it had not been able to attract attention of the new government under
whose rule it had already suffered an additional loss of Rs7 billion.

Over the past five years, the PSM has suffered a total loss of about Rs200bn.

“The PSM reached this state due to unchecked corruption, inefficiency,
over-employment and government’s lukewarm attitude towards its revival,”
a summary of the industries ministry says. Yet no action has been taken to
stop the rot.

Last month, the ministry sought the government’s intervention, suggesting
four options regarding revival, liquidation, privatisation and closure.

The ministry believes an upfront injection of Rs28.5bn could revive the mills,
while its closure would need Rs57bn to clear its liabilities. The summary was
rejected by the cabinet’s Economic Coordination Committee.

On Sept 8, the ECC agreed to sanction Rs2.9bn to pay three-month salary
of employees but the amount had not yet reached the PSM, an official said.

As things stand now, the PSM’s equity is negative to the extent of Rs200bn
(Rs90bn liabilities and Rs110bn cumulative losses), including over Rs45bn
bank loans, gratuity, provident fund and outstanding dues of the Sui Southern
Gas Company.

Source

 

[arushbhai]

Lol, this is what happens when you have one of the worst dictatorship followed by one of the most corrupt political party rule pakistan. I would say, privatize it along with PIA. They are sucking blood and sweat out of poor pakistanis every day.

 

[[Bregs]]

SAIL has been turned around in recent past but its better for these cos. if govt sells its majority stake

 

[farhan_9909]

Much better

as this will force them to privitize them as soon as possible

 

[ziaulislam]

Lol, this is what happens when you have one of the worst dictatorship followed by one of the most corrupt political party rule pakistan. I would say, privatize it along with PIA. They are sucking blood and sweat out of poor pakistanis every day.

that worst dictator made it a profitable organization and was selling only 25% shares at 40 billion when your honest supreme court stopped it and then we lost a 100 billion rupees in direct and billion indirect losses

PS
i am against mushi just stating the obvious

 

[Yogi]

why aren't they buying raw material from international market???

Steel industry is the backbone of any developing economy, if u don't pay attention now, u'll suffer a lot in future.

N why aren't there much big private n foreign players in Pak Steel industry, as PSM production is quite low considering the size of Pak economy?

 

[farhan_9909]

why aren't they buying raw material from international market???

Steel industry is the backbone of any developing economy, if u don't pay attention now, u'll suffer a lot in future.

N why aren't there much big private n foreign players in Pak Steel industry, as PSM production is quite low considering the size of Pak economy?

Tuwairqi Steel Mills Limited

You are right Pakistan should have the capacity to complete its own demand atleast

though after decades now many private firms are establishment steel production mills.
Tuwairqi owner is saudi and has started the production this year

1 more by a pakistan is set to come online soon while some other has invested into this aswell

 

[Yogi]

Tuwairqi Steel Mills Limited

You are right Pakistan should have the capacity to complete its own demand atleast

though after decades now many private firms are establishment steel production mills.
Tuwairqi owner is saudi and has started the production this year

1 more by a pakistan is set to come online soon while some other has invested into this aswell

Whats the production capacity of Tuwairqi?

R some Chinese companies also there?

 

[Sugarcane]

So, Lohaar family is planning to buy shares

 

[farhan_9909]

Whats the production capacity of Tuwairqi?

R some Chinese companies also there?

1.28million tons

in all pakistan production capacity stands at 4.9million tons while demand is of 8.4million tons

 

[BATMAN]

So, Lohaar family is planning to buy shares

Have mercy on Lohaars and Punjabis... if you do not know him, ask me! i even know their scarp shop at Brandrath road and their friends at bilal ganj.

By family... they are Kashmiris.

 

[Sugarcane]

Have mercy on Lohaars and Punjabis... if you do not know him, ask me! i even know their scarp shop at Brandrath road and their friends at bilal ganj.

By family... they are Kashmiris.

Challo yaar - Kabadia kah loo

 

[Luffy 500]

How many steel companies do PAK have? Why can't U guys learn from the chinese way of running successful state owned enterprises? While India has also some very good examples of successful state run companies in steel & heavy industry. Korean POSCO became a global behemoth under state ownership before it became privatize. Privatization of everything is not always the answer for developing countries at the very starting phase of industrialization. The gov should have business in certain strategic sectors such as steel and heavy industry.

 

[cloud_9]

Now someone can pick it up for a few nickels

 

[Viking 63]

PSM should be closed down. as its beyound any revival!!. It was based on outdated technology even in 1977 when Soviets gladly agreed to provide it.. In pakistan the only thing will work is in private sector, govt's should stay away from running any kind of mills or Airlines...In pakistan govt has been running Steel mill and PIA for ever, and finally it has come to this state. these are Institutions which require Proffesional mangement and Personals. A second rated army general or Civil service officer(Brown Sahibs) are the last thing u need to make them Profitable !!!