Resuscitating steel production: Pumping inputs to boost PSM

Two ships carrying iron ore arrive at jetty.

KARACHI:

Two ships carrying iron ore of 20,000 tons and 50,000 tons have arrived at the Pakistan Steel Jetty at Port Muhammad Bin Qasim, according to Pakistan Steel Mills (PSM) sources.

Meanwhile, the ship that brought 50,000 tons has started offloading on September 19, said a spokesman.

Earlier, two ships carrying 50,000 tons each of coking coal from Australia were also cleared at the Pakistan Steel Jetty, while one carrying 55,000 tons of iron ore from Mauritania is expected to reach by October 6.



With the arrival of these ships, the total quantity of raw materials stock of PSM has increased to 160,000 tons of coal and 112,000 tons of iron ore (Lump/Fine).

The management is confident that with the arrival of the latest ships, the production and capacity utilisation of the mill will further increase and help achieve the targets set by the government.

It is pertinent to mention that the current average capacity production utilisation of PSM has increased to almost 25%. The total installed capacity of the mill is 1.1 million tons per annum.

“PSM workers and staff are working hard for the revival of the national asset,” reiterated PS Chief Executive Major General (R) Zaheer Ahmad Khan. Furthermore, the latest arrived raw material will help in increasing the production level of the mill up to 77% by January-February 2015, however, the timely release of financial package will be of pivotal importance.

PSM is one of the 35 steel mills that the former Soviet Union established in different countries with 1.1 million tons standard production capacity. It is the only integrated steel mills in Pakistan with a massive workforce of over 16,000 employees, which according to many experts, is one of its major problems in turning it into a profitable company.

The organisation has accumulated huge losses in the past six years and needed an injection of about Rs18-20 billion in one go to purchase raw materials and be able to return to optimal production levels.

However, this government, like its predecessor, has been struggling in improving affairs at PSM as it continued to pour in money in small installments. Resultantly, the company has been running at an embarrassing low production capacity of below 5%, the lowest capacity ulilisation in its history of more than 32 years.

Pakistan has been one of the few countries that failed to expand their steel mills. The mills set up with Soviet assistance in Iran and other countries are now running at an annual capacity of about 3 million tons per annum.

However, this time the government has decided to end this vicious cycle by pumping in a huge amount of money at one go.

Published in The Express Tribune, September 23^rd, 2014.

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