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Likely steel demand of 10m tons in 2 to 3 years will push expansion and investment in near future

Likely steel demand of 10m tons in 2 to 3 years will push expansion and investment in near future

Interview with Dr. Munir Ahmed — Chief Executive Officer, Aisha Steel Mills Limited


PAGE: Kindly tell us something about yourself and your organization:

Dr. Munir Ahmed: I am metallurgist with bachelors, masters and PhD in the field. I started my carrier as a research scientist and published many articles in leading international journals. Subsequently, I focused my attention in developing special steels in lab and then on industrial scale for a wide variety of industrial applications. As head of Peoples Steel Mills, prior to joining Aisha Steel, I developed and introduced more than 300 grades of alloy steels, as per international quality standards for the local manufacturing sectors.

Presently, I am working in Aisha Steel Mills. The project started as a joint venture between Arif Habib Group, Metal One Corp (a subsidiary of Mitsubishi Corp of Japan) and Universal Metal of Japan. Subsequently, with mutual agreement, majority shares were acquired by Arif Habib Group. All the equipment was acquired from the leading Japanese manufacturers. The name plate capacity of the mill is 220,000 tons of CRC per annum.

Currently, Aisha Steel Mills is undergoing expansion to increase CRC production capacity to 450,000 tons. A continuous galvanized line with an annual capacity of 250,000 tons is also being added taking overall production to 700,000 tons per annum. The products will be sold in the local market and surplus will be exported.

PAGE: What is your take on the steel sector in Pakistan?

Dr. Munir Ahmed: The consumption of steel in Pakistan is around 35 kg per person, a fraction compared to advanced countries. This is about to change as demand is expected to grow at a rate of 10% or higher. All the major players are expanding their production capacities and new groups are entering the arena. Steel demand, which stands at around 7.5 million is expected to touch 10 million tons in two to three years. We may see big plants being set-up in the near future.


PAGE: Kindly tell us something about the price of steel in Pakistan compared to other countries:

Dr. Munir Ahmed: The prices are relatively higher compared to the next door neighbors, China and India. The local producers have to import most of the raw materials needed for steel manufacturing coupled with high energy cost. The absence of requisite economy of scale and local raw material, the cost of production and therefore the prices are relatively higher. As the industry grows and new technologies are acquired, the cost will come down.

PAGE: What are your views on taxes imposed on steel sector?

Dr. Munir Ahmed: The steel sector is relatively small and cannot be exposed to cheap imports from neighboring countries. As the industry grows, the government needs to provide reasonable protection till such time the industry matures. The same principle was followed by all other countries that encouraged local manufacturing, including China and India. The protection provided in the form of regulatory duties and taxes to the local producers should continue.

PAGE: What are your suggestions and expectations from the upcoming budget?

Dr. Munir Ahmed: The budget should encourage growth and job creation. Duties should be rationalized and maintained at a level that does not expose local manufacturing to undue pressure. Export based industries should be given incentives but not at the cost of local manufacturing.

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