Pakistan Steel announces new sales policy

Buyers will not be subject to anti-corruption probe, says acting CEO Imtiaz Lodhi.

KARACHI: Pakistan Steel Mills (PSM) has introduced a new sales policy which guarantees that dealers who purchase from PSM will not be subject to unnecessary scrutiny by anti-corruption investigators in the future.

The policy has been introduced in light of the reduction in PSM sales due to dealers’ apprehension regarding the current investigation into corruption at PSM.

This was announced by the acting chief executive officer (CEO) of PSM, Imtiaz Lodhi, who said that a clause had been added to the standard contract between a dealer and PSM that provides dealers with protection from possible investigation in the future. He added that this will help in achieving the Rs30 billion sales target set for the year.

Lodhi told The Express Tribune that this policy was formulated after consultation with dealers in Karachi who purchase from PSM and was aimed at reviving trust between PSM and its customers. He added that dealers in Lahore and Islamabad will also be consulted by the PSM soon.

Lodhi said that the daily sales of the mill are currently at Rs80 million which should be raised to Rs120 million as a result of this policy. He said that the mill will now sell its goods in the form of bundles of 50 tons each which will increase sales while decreasing inventory cost.

Orders taken in advance, said Lodhi, will be transacted at a previously agreed price instead of charging the spot price of the day that the transaction was executed. He added that the price will be fixed the day the letter of credit is obtained and purchasers will have to pay the amount in advance.

Regarding PSM’s financial health, Lodhi said that letters of credit for the import of raw material were being obtained easily from banks. He said that PSM deals with only three banks, one of which is the National Bank of Pakistan which is currently extending a credit line worth Rs7.6 billion to PSM.

Lodhi added that the supply of raw material to PSM is also stable and that the mill has enough raw material to produce 50 per cent of capacity for 22 days.

Published in The Express Tribune, November 27^th, 2010.