Analysis of Pakistani Industries

STEEL INDUSTRY

Presented By: Asif Mustafa

Danish Zahid
 Agenda
• History
• Introduction
• Importance
• Investment
• Products
• Imports
• Exports
• Market Share
• SWOT Analysis
• Health Hazard
• Future Potential
• Forward & Backward Linkages
• Safety Majors
• Recommendation
HISTORY
 History
• The initial idea for a domestic iron and steel mill was put
forward in the first five year plan of Pakistan (1955 – 1960).

• In January, 1969, Pakistan Steel concluded an agreement

with V/O Tiajpro export of the then USSR for the preparation
of a feasibility report into the establishment of a steel mill at
Karachi.

• The foundation stone for this gigantic project was laid on the
30th of December, 1973 by the then prime minister Mr.
Zulfiqar Ali Bhutto.
Introduction
 Introduction
• Provides techno economic base for the
development and growth of engineering
and construction industry

• Steel is the backbone of bridges,

skyscrapers, rail roads, automobiles and
appliances.
Importance
 Importance
• A 2.5km long seawater channel connects
the seawater circulation system to the
plant site with a consumption of 216
million gallons of seawater per day.
• The cars we drive, the buildings we work
in, the homes in which we live and
countless other facets in between.
• Production capacity of 1.1 million tones of
steel.
 CONTINUED…
• Steel is used in our electricity-power-line towers,
natural-gas pipelines, machine tools, military
weapons-the list is endless.

• Employs about 14,500 workers.

• Steel has also earned a place in our homes in

protecting our families, making our lives
convenient, its benefits are undoubtedly clear.
INVESTMENT
 INVESTMENT
• Investment In Steel Sector:

As on June 2000 RS 80,000 million

Investment Added up to 2004 RS 3,500 million

Projected Investment (2005 – 2010) RS 168,000 million

Total Projected Investment by 2010 RS 251,500 million

Products
 Products
• COKE
• PIG IRON
• BILLETS
• HOT ROLLED COILS/SHEETS
• COLD ROLLED COILS/SHEETS
• GALVANIZED COILS/SHEETS
• COLD FORMED SECTIONS
 By Products
• COAL TAR
• GRANULATED SLAG
• AMMONIUM SULPHATE
• NITROGEN BOULDER SLAG
Imports
 Imports
Pakistan imports steel raw materials and also a large no of secondary
or semi finished steel products from these countries. 90% of raw
material is being imported:

• Germany
• Holland
• France
• Russia
• U.S.A
IRON ORE:
• India
• Australia
• Canada
• Brazil
Exports
 Exports
• PAKISTAN STEEL have been able to export a large
quantity of products, i.e. pig iron, coke, billets, and hot
rolled coils, to
• INDIA
• JAPAN
• SWEDEN
• SINGAPORE
• ROMANIA
• BANGLADESH
 Exports
• SAUDI ARABIA
• UNITED ARAB EMIRATES
• SRI LANKA
• INDONESIA
• SOUTH KOREA
• USA
• GERMANY
• CHINA ETC
 Market Share
Products Total Demand P.S Production Market
Annual Share of P.S

Pig Iron 100000 40000 40%

Billets 4105000 355000 8.3%
Ship Plates 100000 - -
HR products 900000 445000 49%
CR products 250000 110000 44%
Galv. Products 200000 40000 15%

Total 5655000 990000 17.5%

 SWOT
Analysis
 Strength

• Cheap labor

• Low cost
 Weakness
• High cost of energy

• Poor infrastructure.

• Lack of R&D investment

• Dependence on imports for steel

manufacturing equipments and technology
 Opportunities
• Govt. has decided to increase the
production capacity from 1.1ton to 20
million tons by 2020.

• Govt. decreased 20% GST

• The large iron ore and coal reserve of

Pakistan provide good opportunity in the
steel sector for enterprising investors.
 Threats
• Slow growth in infrastructure development

• Possibilities of export growth from China

HEALTH HAZARDS
 HEALTH HAZARDS
• Pollution caused by the steel mills has become a
serious health hazard to residents.

• contact with hot metal;

• fire and explosion;
• extreme temperatures;
• radiation (non-ionizing, ionizing);
Future Potential
 Future Potential:
• Pakistan government is preparing a new policy to achieve an annual
production target of 15 million tonnes of steel by 2020.

• The Engineering and Development Board (EDB) of the ministry of

industries and production has evolved the long term ‘National Steel
Policy’ with a view to cover the widening demand and supply gap by
achieving a production target of 15 million tones of steel by 2020.
Forward & Backward
Linkages
 Backward Linkages
• Transportation
• Machinery
 Forward Linkages
• Automobile Industry
• Construction Industry
• Arms and weapon
• Transportation
• Fan Industry
• Surgical
• Engineering
Safety Majors
 Safety Majors
• PSMC has an in-house Environment Protection Department to
cater for monitoring of Air, Water, Solid, Noise, Radiation and
Thermal pollution to enable compliance with prevalent Pakistan
National Environmental Quality Standards (“PNEQS”).

• Besides conducting regular inspections, the Safety Department

also undertakes periodic training sessions for the workers.

• PSMC obtained the ISO-9001:2000 certification in 2003 and the

ISO-14001:1996 certification (for Environmental Standards) in
2004.
Recommendation
 Recommendation
• R&D

• Proper knowledge and Documentation

• Proper utilization of local natural resources

• Transfer From Informal to organized