Major General (retd) Muhammad Javed has been appointed new chief executive officer of Pakistan Steel Mills (PSM), the country’s largest industrial complex, filling a post which has been lying vacant since March 12, 2011, sources familiar with the matter told The Express Tribune on Wednesday.
The Ministry of Industries and Production, according to sources, has already issued a notification in this regard. Javed will take charge on Thursday, replacing acting CEO Wasif Mahmood.
Javed had already served PSM as chairman from September 2006 to May 2008. During that period, PSM’s production graph remained upwards and his re-appointment, this time as CEO, was seen positively by the staff, sources said.
In Javed’s previous two-year term, PSM reported profits of Rs3 billion and Rs2 billion respectively. It operated at 90% capacity and ran three shifts even on the troubled day of May 12, 2007. For the first time in its history, the steel giant paid off debts worth Rs2 billion.
At that time, the company held capital comprising cash reserves and finished goods worth Rs20 billion, sources said. It even had raw material available for the next four months.
According to sources, Javed also worked for the benefit and welfare of workers. He awarded four bonuses to the entire staff in one year alone and workers also got their participation fund. He also made improvements in infrastructure and environment, giving a new look to the enterprise including setting up parks for the workers.
However, after he left, the enterprise reported losses of Rs26 billion, Rs11.5 billion and Rs11 billion respectively in the next three years, sources said, adding the losses for the current year were estimated at Rs18 billion.
In normal circumstances, PSM produced at 80% of the capacity, but at present it is working below 20% and daily losses are said to have surpassed Rs50 million.
In a bid to prop up the industrial giant, the prime minister has approved a Rs20 billion bailout package as the mill is going through its worst financial crisis. However, the finance ministry has put some conditions including CEO’s appointment, expansion of PSM and reconstitution of the board of directors before the release of funds, sources said.
The mill has already received Rs3 billion and has demanded another Rs9 billion, but the finance ministry wanted the appointment of a new CEO before injecting further money to help the mill purchase raw material.
The board of directors had been reconstituted and CEO had been appointed, two of the conditions for the bailout package, sources said. On the expansion front, PSM was in talks with a Russian firm for maintenance of blast furnace and coke batteries as well as installation of new machinery and modern technology to make the firm profitable.
Earlier, the government had approached several key figures to take charge of PSM and turn it into a profitable entity. According to sources, SM Munir, President of Indo-Pak Chamber of Commerce and Industry (IPCCI), was also offered the position, which he turned down for he was not given full authority.
Faizullah Abbasi’s name also made it to the shortlisted candidates last year. However, sources said, the government was not able to establish the connection it needed.
The government also held talks with Javed, who also wanted full authority in terms of hiring and firing of workers, sources said.
Besides appointing the CEO, sources said, the government also decided to inject about Rs5 to Rs6 billion to help the giant purchase raw material.
Published in The Express Tribune, April 26th, 2012.