Maj Gen (R) Zaheer Ahmed Khan - 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 the media for its slide into a heavy loss-making enterprise. Actually, ever since its inauguration in 1973, Pakistan Steel has seen many ups and downs during the course of its existence.
There have been periods of indiscipline and disruption due to political reasons, resulting decline as well as years of steady growth, high production and profitability. In fact leaving last 6 six years, during previous 24 years, the mill was in operational profit in 16 years within accumulated profit of Rs.9.5 billion in 2007-2008.
      Right now we at Pakistan Steel are beginning to emerge out of a period of doom and gloom which started in 2008-2009 when the international economy went into a recession with resulting crash in the prices of the basic raw materials (iron ore and coal) imported by the steel mills, while PSM continuing procuring these at high cost thus against long term contracts which were not negotiated for reduction recheck up or down while some of the essential capital repairs such as of Blast Furnace and Thermal Power Plant were also not carried out.
This coupled with corruption made a bad situation even worse. There has been gross neglect of the essential repairs and maintenance of the installed machinery. This resulted in the gradual deterioration of the machinery and the steel mills was unable to sustain the essential level of productivity. In spite of being provided with conspicuous financial assistance by the government during this period of 5-years there was no recovery.
      When I took charge of Pakistan Steel as the Chief Executive in April 2014, production had fallen to 1.4% of capacity. In international parlance such an industrial plant is called Dead Level Industrial Unit. It was my endeavour that Pakistan Steel – the country’s biggest public sector plant – should be revived as fast as possible and I sought the financial assistance of the federal government besides doing my best to raise the morale of the officers and workers and motivating them to put in their best in line with our motto that, ‘what is good for Pakistan is good for Pakistan Steel ‘never give up’ and “self-belief leads to self-reliance”.
      The government sanctioned a package of Rs.18.5 billion, half of it for purchasing raw material and half for paying delayed salaries, utility bills and other expenses.
Though we received the first and later monthly installments usually month late, nevertheless we were able to utilize these well. The task of regular repair and maintenance had not been undertaken for 6 years, but without obtaining any extra monetary package for this task, I was able to carry it out effectively in all the departments so as to prepare them for continuous high levels of production. What has concluded that we nevertheless being pursued through relentless local efforts and major repairs of power plants and blast furnaces allied equipments.
      I am pleased to inform the eager Pakistanis who are worried about prospect of Pakistan Steel that we have now achieved capacity utilization of almost 60 percent and our thermal power plant is intermittently generating 50 MW of electricity i.e. nearly three times the power it was producing when I joined Pakistan Steel.
      As of now the steel mills has huge quantities of (iron ore 1-lakh tone and coal 1.5 lakh tonne) and other raw materials in its stockyard. Moreover, two more ships are expected to arrive shortly at the jetty to further replenish the stock.
      Besides we have billions of rupees worth of international quality finished products in stock and we follow a transparent procedure in marketing and sales.
I must point out here that we are facing problems in selling our finished products because of availability of imported steel items from China at dumping prices and supply of smuggled steel products in the domestic market.
These are all affecting the sales of products made by Pakistan Steel. In this regard we were trying to persuade Ministry of Finance and FBR through our Ministry of Industries to impose regulatory duty on the very cheap steel products which PSM manufacturers and have finally succeeded in getting through not full but still considerable relief on “hot rolled products”.
      Our target is the achievement of 77% production capacity by the end of April, 2015 and Insha Allah we will succeed in doing so. This will be a major achievement, enabling Pakistan Steel to be on break-even point for the first time after nearly a decade.
      At the end I just want to say that those who decry and criticize this great national asset – Pakistan Steel – should remember that it is thanks to this seminal organization that such a large number of downstream engineering plants have come into being in our country in its downstream industrial area. Pakistan Steel is the mother industry which has laid the foundation of a strong and prosperous Pakistan by providing basic manufacturing materials at the door step of local industries at minimal cost and time – delay.
Pakistan Steel has been instrumental in creating new job opportunities, promoting advancement in technical know-how, enlarging the range and variety of manufactured products, opening new vistas of technical and economic cooperation internationally and giving an impetus to Research & Development in the field of Metallurgy.
It has spawned three townships at the perimeter of Karachi, which alongwith Port Qasim and allied downstream industries of Pakistan Steel are the new centre and future for development of Karachi and Pakistan. It has paid back Rs.108 billion in taxes/duties against Rs.24 billion initially spent on its establishment and has the gargantuan Infrastructure know-how and potential to produce 3 to 5 million tones of steel to meet Pakistan’s requirement for next 10 to 15-years.
My message to all those concerned about Pakistan Steel is a positive one. The worst is over. The process of recovery has made great strides. As the saying goes: “Day by day in every way, we are getting better and better”. The day is not far off when we will be able to be proud once again of a fully functional and profitable Pakistan Steel.
The writer is chief executive officer of
Pakistan Steel.