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PAKISTAN
STEEL: THE TURN AROUND
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An exclusive interview with Chairman Pakistan
Steel, Muhammad Afzal Khan
By Syed M.
Aslam
Aug 27 - Sep 02, 2001
The financial year ended June 30, 2001 was the
period of many firsts for the long financially Pakistan Steel Mill,
the largest industrial complex of the country. It was the year of a
financial turn around, financial restructuring, heavy layoffs, record
sales, unprecedented capacity utilization, firstever payment of long
standing loan, and of course showing a profit. In short, it ushered in
a visible shift in direction, and attitude, to run the organisation on
purely commercial lines, a thought alien to the public sector
organizations, all of which have been churning out losses with few
exceptions.
The impressive figures issued by the Pakistan Steel
(PS) show a profit of Rs 580 million compared to an estimated loss of
Rs. 540 million in the previous year. PS claims that the turn around
was made an year ahead of the schedule due primarily to unprecedented
sales amounting to Rs 17.54 billion way over its budget target of Rs
15.60 million. It also says that the PS achieved the sales target ever
and in the process surpassed its previous highest sales of Rs 15.8
billion. In addition, PS says that in 2000-2001 it also surpassed the
steel production by achieving a capacity utilization of 86 per cent, 3
per cent more than the budgeted capacity of 83 per cent.
During its 20 years of operation the image of the
PS had been badly tarnished by stories of massive corruption and huge
losses, particularly during the rule of the political governments,
twice each by disgraced former governments of Benazir Bhutto and Nawaz
Sharif. One of the former chairman, Usman Farooqui alongwith his wife
and daughter, were charged with massive corruption and abuse of
authority and cases against him are still pending before the courts.
The present chairman of PS is Lt. Col (Retd)
Muhammad Afzal Khan who took charge in December 1999. He is PS insider
for the last twenty years in various capacities. During his
association with the PS which lasts since its early days of
development, Afzal has served as GM Industrial Relations, Security,
Principal Staff Officer to the Chairman, Director Marketing, etc. He
seems saddened about the abounding negative perceptions about the PS
and call them the personal failings rather than the failing of the PS
as an entity. PAGE talked to him in detail about the issues and
concerns about the PS in the backdrop of its past problems, present
performance and future prospects. The following is the excerpts of an
exclusive interview with him.
Over staffing
Calling over staffing the single biggest malaise
undermining the operations, productivity and profitability of public
sector organizations — PS being no different until recently —
Afzal attributed the problem to a variety of reasons. Number one, the
indifference of every government towards public organisations: top
managers though appointed by the government are answerable to the
relevant ministries. And number two, the interests of the chief
executive officers of the public sector organizations differing
entirely from the interests of the organization itself, a situation
further worsened by the fact that administrative officers are assured
of salaries and perks irrespective of a showing a profit or a loss.
There is also a fundamental difference in attitude
between private and public sector organizations. Unlike the former,
where each enterprise is owned by an individual or a group of people
each of whom is dedicated entirely to the welfare of the organization,
the counterparts in the public sector are conditioned to feel no such
qualms for the reasons stated above.
An orphan
Calling public sector an orphan which neither has a
patron nor a sponsor, Afzal said that it is nevertheless owned by 140
million people of Pakistan and its government. However, he added,
something which is owned by such a large number of people
simultaneously is not really owned by anyone.
He lamented that the executive officer of a public
sector organization is appointed by the government for a period of 2-3
years. In many cases, he is a stranger to the organization he is
appointed in and yet by the time he becomes effective his time to move
draws to a near. In addition, though the CEO is appointed by the
government he is controlled by the relevant ministry which regards
him/her as a government servant who is suppose to receive and comply
with all directives, orders and decisions of the ministry. In short,
the CEO is supposed to behave like a "self-driven
subordinate" thus discouraged not to stick his neck out for the
betterment of the organization he is heading.
That explains why the public sector is suffering
losses year after year and its CEOs talking of financial hammering. On
the other hand, the private sector is better organized and better
lobbied to act as a powerful pressure group and even individual
entrepreneurs have influences in the right quarters so that their
interests are better served in various sectors of the government.
That's why, Afzal said, the public sector keeps on suffering from all
consequences of failure, deficits, shortcomings like any and all other
government departments. And Pakistan has been no exception.
Tracing the history of over-staffing at the PS,
Afzal said that it has been a incessant problem since its inception:
The Russians who gave us the plant had proposed that PS would require
15,000 regular workers during the operational stage. However, PS had
exceeded 15,000 regular employees by early 1980s when not even
one-third of the plant was constructed and not a single unit had gone
into production. By end 1981 when one coke-oven battery and a blast
furnace had barely gone into production, the manpower had touched the
level of 24,000 regular employees. That was the time when an official
ban was imposed on recruiting. In theory, the ban has continued to be
in place for last 20 years and yet the same was violated by many
governments and managements with impunity. It is also sad that in
addition to regular employment PS has also borne the brunt of
temporary employees ranging from 3,000-6,500 from time to time.
Top heavy organization
As if that was not enough, Afzal said, PS also
suffered from the top heavy character of its administration comprising
far too many senior members in the management causing immense
financial burden to the organization. "I say from my experience
that excessive that overstaffing and top heavy management led to gross
inefficiencies and low productivity on the one hand and unnecessary
increase in the cost of production on the other. In turn this resulted
in the breeding on uncalled for problems for the organization. If
things had to improve restructuring the manpower was mandated."
Retrenching
Afzal has no qualms to use that mandate to lighten
the overstaffed and top heavy organization through "a voluntary
retirement facility": The number of regular employees which stood
at 20,533 on May 20 last year, 3,000 temporary workers not included,
was reduced to 14,407 on June 30 this year, depicting a cut of 6,126
jobs or an over 30 per cent slash in the regular workforce.
By August 20, a day prior PAGE interviewed
the PS chairman last week, the number of regular employees further
reduced by 130 bringing the figure to 14,277 level. What distinguishes
the restructuring at the PS is that was applied at all levels of the
organization — workers, staff and management. During last fourteen
months the number of directors has been reduced from 7 to 5; number of
general managers from 35 to 15, number of deputy general managers from
over 100 to 44; number of managers from 650 to 388; and number of
deputy managers from 600 to 380. In all, the number of these
administrative posts have been reduced from almost 1,400 to 832 in an
organization which Afzal said, "has too many service people not
really required."
In last fourteen months, thus, the number of
regular employees has been reduced by 6,256 from 20,533 to 14,277 as
on August 20 while the number of temporary employees has been reduced
by 1,514 from 3,000 to 1,486 last week.
Afzal said that PS target is to further reduce the
number of regular employees to 12,500 by the end of the current
financial year and at the same time to reduce the temporary employment
from 1,486 at present as much as possible during the same time.
Benefits
The voluntary retrench facility which offered
uptodate earned benefits plus two gratuities for each year of service
completed cost PS Rs 3.78 billion which was paid by its own resources
without any subsidies from the government or any loans from the bank.
It will save Rs 1.2 billion annually to the organization by reducing
the expenditure on manpower, Afzal said.
So hasn't the massive reduction in manpower, both
regular and temporary, affected the workings of the PS? No, says Afzal.
"Production has been increased despite the demise of 7,700
employments. Since May 20 last year, the production has not only gone
up but PS has also become a more efficient, more cost and sales
effective organization. The cash flow has improved to meet all our
financial needs from within our own resources. Against a budget
production target of 83 per cent we have production capacity
utilization of 86 per cent. Against budget sales target of Rs 15.6
billion we have sales figures of Rs 17.54 billion, an all time sales
record not only for the PS but also for Pakistan. Never before in the
history of PS the organization has reached anywhere near the Rs 16
billion sales mark not to mention Rs 17.54 billion that we have
achieved."
Attitude of management
Afzal said that PS has an altogether different
attitude. "PS, the largest industrial complex in the public
sector, was all along been managed by all other public sector
companies as nothing more than a government department. We have
changed that outlook. In the last one year, we have tried PS as a
private enterprise purely on commercial lines and without being
apologetic in the least we claim and stand for that PS is not a
welfare organization like the Edhi Trust: When it is not being run on
people's donations it has to be administered on commercial basis. In
simple words this means that we do everything that earns us money and
we should do anything that saves us money. The difference today is
that the stake of the organization has become the stake of the
management. It is this change in the approach of the management which
has made the entire difference for the future of the organization in a
matter of one year."
First ever loan installment paid
"After recurring losses of over one billion
each year for long PS managed to make a profit of Rs 580 million last
year despite incurring such heavy expenditures as payment of Rs 3.78
billion on voluntary retirement facility; Rs 700 million to Customs
authorities on account of slabs laying at Port Qasim for last 5 years.
In addition, PS has also paid Rs 2.45 billion to the banks on account
of the government loan including Rs 95 million, the first installment
of the principal amount of Rs 11.35 billion payable in 12 equal
installments as per the financial restructuring plan of the present
government, plus 1.5 billion in interest."
It is the first time in the fifteen-year operations
of the PS that it has paid such a huge amount comprising of an
installment and the markup on the loan for Rs 11.35 billion which
remained outstanding in the account books even before it started
production. The loan was borrowed by the Government of Pakistan from
the banks during the construction of the PS and the then government
has assured the payment till the PS showed a profit, which only
happened last year.
However, the government never paid the loan which
caused the mark up to rise to Rs 7.767 billion increasing the debt
burden of the PS to over Rs 19 billion by June 30 last year. In the
financial restructuring plan the present government has allowed the PS
to pay the principal amount of Rs 11.35 million in 12 equal
installments whereas the mark up of Rs 7.767 billion, treated as a
secondary loan, has been allowed to be paid after 12 years in seven
equal installments.
Afzal said that the present management is now
focusing on the repair and maintenance plan of the plants for which as
a mount of Rs 3 billion has been set aside.
Prices
Coming back to production, PS bettered its capacity
utilisation to 86 per cent last year which was 3 per cent more than
the budget capacity utilization of 83 per cent. Total production stood
at 944, 000 tons a fete compared to capacity utilisation average of 76
per cent over the years. As mentioned earlier, PS recorded
unprecedented sales in an organization where sales targets were never
achieved before.
Asked if the record sales were fuelled by increased
prices of steel products, Afzal said that Steel is one sector where
prices remain the same and attributed the financial turn around on the
10 per cent increase in production as well as change in marketing
strategy of "customer is the king" for making all the
difference. PS is reaching out to customers like never before and
customer oriented services are making people identify to PS. He said
that "prices of all steel products except for slabs — cast
billet, rolled billet, plates, HR-products, CR-products and Galvanised
products — have fallen in term of dollars during the last six
years."
Competitors
Putting the demand of steel in the country over 3
million tonnes, Afzal said that almost one-third of it is met by the
PS while the rest is shared between the ship-breaking industry,
melters, re-rollers and imports. Ship-breakers and melters meet the
entire demand for long products among themselves to supplement the
demand met by the PS.
On the other hand imports primarily comprise flat
products. There is a certain product range which is beyond PS
capability is met by imports which also include a range of secondary
products of lower quality. But Afzal feels that PS is not allowed to
play its due role due to certain restrictions and absence of level
playing field.
During last 4 months the price of such raw
materials used by the PS as iron ore has increased by 4 per cent while
the price of coking coal has increased by 18 per cent in dollar terms.
With the weakening dollar-rupee parity this means an additional burden
on the PS.
In addition, the Budget 2001-2002 puts PS into a
bad situation due primarily to excessive import duty on its basic raw
materials compared to imports by its competitors — ship-breakers,
melters, re-rollers and particularly the exporters.
Anomalies
"A year ago", Afzal said, "the
ship-breaking industry was subjected to an import duty of 15 per cent
plus Rs 1,500 per ton on ships imported for scraps. The melters, on
the other hand, were allowed to import the shredded scrap at 15 per
cent duty. The raw materials imported by the PS were subjected to 10
per cent duty under the import tariff protection available to the PS
compared to 65 per cent regular duty five years ago and a reduced duty
of 35 per cent till last year. This was done to provide relief to all
the sectors competing with the PS.
"All of the competing sectors including the PS
agreed last year that import duty on ship-breaking industry should be
reduced from 15 per cent to 10 per cent and from Rs 1,500 per ton to
Rs 1,000 per ton. It was also agreed that the melters should be
allowed a concessionary import duty reduction from 15 per cent to 10
per cent and the import duty on PS's primary raw materials such as
iron ore, which has 60 per cent iron content, should be reduced from
10 per cent to zero per cent.
"In Budget 2001-2002, the import duty on ships
for breaking purposes was reduced from 15 per cent to 10 per cent and
the additional duty of Rs 1,500 was withdrawn altogether. Similarly,
the import duty for the steel melting industry was also reduced from
15 per cent to 10 per cent. The import duty on the basic raw materials
used by the PS, however, reduced from 10 per cent to 5 per cent and
was not brought down to zero level as agreed.
"Pig iron, a finished product, is now allowed
to be imported at 5 per cent duty at par with iron ore, the basic raw
material of the PS which has only 60 per cent iron content. This is
highly inequitable and we have pressing for the removal of the
anomaly. Similarly, the import duty on billet at present is fixed at
20 per cent and not 30 per cent as expected. In addition, both Hot
Rolled and Cold Rolled varieties are subjected to import duty of 30
per cent and import of slag, a by product, is subjected to an
incompetitive duty of 10 per cent.
"This is like treating flour at par with bread
for the purpose of taxation, a great anamoly indeed as the first is a
raw material and second a value-added product. It is easy to see the
difficulty PS is facing to compete with finished materials allowed to
be imported at par with the raw materials which it uses like iron ore
which has an iron content on 60 per cent.
"Thus, PS is suffering for the last two months
— since July 1 when Budget 2001-2002 came in force, as these
anomalies are costing us a sales loss of Rs 13 million each day. It
has also created a sense of uncertainty in the steel market as enough
letter of credits for the import of steel and products have already
been opened to hurt PS for the rest of the year even if the government
corrects the anomalies. The situation has also forced the PS not to
finalise its budget."
Demand trends
Highlighting the important role steel plays in any
economy, Afzal said that steel like power and cement is seen as an
indicator of development. According to an estimate ten years ago steel
companies were expected to grow by 7 per cent per year. Unfortunately,
that prediction failed to come through as the demand of steel during
the last ten years remained unchanged like it has been for the last
three decades. Unless big development projects, particularly in the
public sector and mainly in the construction industry, are initiated
the demand for steel would remain the same in the years to come.
Afzal said that iron and steel mills anywhere in
the world start at one million ton and this is now recognized as the
world standard. This has also been the case with the PS which was
initially designed to have a production capacity of one million tons
and has been able to expand it to 1.1 million tons in recent years
short of extendable capacity of 3 million tons. Iran, India, Egypt,
Korea, Turkey and Finland like the PS started with a production
capacity of one million tons and all of them had extendable capacity
of 3 million tons and beyond. It's only Pakistan which remains
restricted at one million tons.
Calling expansion of PS as inevitable, Afzal said
that it should have been done 10-15 years ago. However, that not being
done and now it is felt that first the PS has to be put in order to be
profitable prior to the much needed expansion. "Expansion can be
done in two ways; number one by incurring huge capital costs or
secondly gradually and bit by bit by paying for it while you earn
which means increasing your product range. PS will pay for its
expansion without incurring outside liabilities."
Afzal expressed dissatisfaction at the non
materialisation at the concept of down stream industries envisioned at
the start of the PS. "There should have been three-times more
downstream industries than the ones functioning at present the numbers
of which is less than four dozens.
Indigenous
Afzal stressed that while the PS is dependent on
imported raw materials like iron ore, coking coal, manganese, PS is
practicing a policy of indigenization. The iron ore available in
Balochistan province and parts of Punjab though not of good quality
but the variety found in an area of the former comes close to the one
required by the PS. We have done tests and found out that 15-20 per
cent of it can be used in mixing. However, lack or total absence of
infrastructure has prevented its use at the PS. We wanted to use 500
tons of it for experimentation only a small portion of which were
supplied to us by the contractors, he added.
Currently the PS is importing the manganese ore
from India, 36,000 tonnes of it is imported by the PS every year.
However, very good quality of manganese, a manganese content of 30 per
cent or more is considered good, is available right here in the
country. PS is much interested to use the local manganese and yet all
the suppliers put together are not organized to provide it.
Safety
Asked to comment on the accident at the bloom
furnace in recent months at the PS which resulted in loss of human
lives, Afzal said that industrial accidents are a feature of
industrial life. "Wherever there are industries there are
accidents. It was only in medieval times that there were no auto
accidents. However, all attempts should be made to minimize all
avoidable accidents. PS is in its nineteenth year of operations and
works on 24-hour basis. There are proper procedures, safety
precautions in place. Safety items are issued to the employees and all
efforts are made to ensure that no accidents take place.
"The recent bloom casting machine accident
resulted in unfortunate loss of human lives. It was an unusual
happening the like of which has never occurred in our 19 years of
operation. Although an enquiry has been conducted and it has linked
some possible causes yet it is very difficult to point one single
cause which had led to the unfortunate accident.
"It is in our knowledge that similar accidents
have taken place in Russia, British Steel and elsewhere. It's quite
understandable that once operations are taking place in environs of
high temperature of 1,600-1,700 centigrade, high voltages and at
heights there is possibility of accidents which necessitates all
possible precautions by the managers and workers on the shop
floors."
Living up to expectations
Asked if PS has lived up to the expectations that
underlined the very basis of its foundation? Afzal said that steel is
the basic requirement of all industries. "It is the mother
industry of all industries, particularly the engineering industry. It
was envisioned that the start of PS would not only give boost to
downstream industries providing easy availability of raw materials for
the engineering industry and also to achieve import substitutions of
steel products which were then imported wholly from abroad.
"Although PS may not have been able to achieve
its full potential yet it has done enough for the country to justify
its establishment and the cost incurred on its installation. It was
established at a cost of Rs 24.70 billion of which Rs 11.35 billion
has been convenienty transferred by the then government to the PS as a
loan paid back to the consortium of five banks. Against this
investment, PS has paid back to the government over Rs 37 billion in
duties and taxes and achieved import substitution of over $ 3 billion.
"Besides, it has provided raw materials to
host of engineering and downstream industries as well as served as an
engine of growth. In addition, it has brought into being a trained
technical workforce of thousands of officers and workers with years of
practical experience of steel industry. Some of our workers have gone
to Russia and bought two steel mills in Ukraine which they running
successfully.
History of Pakistan Steel
The foundation stone of Pakistan Steel, the single
largest industrial complex in the country was laid on 30th of
December, 1973. The gigantic industrial project has already given an
impetus to the industrial growth of Pakistan. With a production
capacity of 1.1 million tonnes of steel annually — which can be
further expanded, PS is in a position to meet the major and even
hitherto unmet demand of high quality steel products and to fortify
its industrial foundation and self sufficiency in steel products.
The total capital cost of the project is estimated
at about Rs. 24.7 billion. Located some 40 kilometers to the east of
Karachi, the huge complex of PS, and its related facilities are spread
over an area of 18,600 acres, or about 29 square miles.
The construction of the complex involved the use of
1.29 million cubic meters of concrete. 330,000 tonnes of machinery,
steel structure and electrical equipment, as well as employment of
over 40,000 workers daily during the peak construction period.
The Pakistan Steel Mills Corporation was registered
as a private limited company in July 1968 to establish Steel Mills in
the public sector.
In January 1971, the Governments of Pakistan and
the then USSR signed an agreement which agreed to provide
techno-financial assistance for the construction of a coastal based
integrated steel complex.
The construction work on the main plant started in
1976. Among the main complexes/ units of the project, the first coke
oven battery was commissioned in April, 1981, the first blast furnace
in August, 1981, the billet mill in October, 1982, the two converters,
one bloom caster and two slab casters of steel making department
between December, 1982 and December, 1983, the hot strip mill in
December, 1983, the second blast furnace in August, 1984, cold rolling
mill in December, 1984, the second coke oven battery in May 1985 and
the expansion project billet caster in November. 1989.
Unloader & conveyor system
As PS is based on imported raw materials viz. iron
ore, coking coal and manganese ore, a special jetty has been
constructed by the Port Bin Qasim Authority exclusively for the PS.
All the raw material is transported to the main plant through a 4.3
kilometers long conveyor belt within half an hour. For unloading raw
material from the ship, two unloaders of 1000 tonnes an hour capacity
each have been installed at the jetty by the PS.
Coke Oven & By-Product Plant
The Coke Oven & By-Product Plant comprises two
batteries of 49 ovens each. The first battery started working on 17th
April, 1981, whereas the second one was completed on 7th May, 1985.
Some very useful by-products like coke oven gas, ammonium sulphate,
coal-tar etc. are being obtained. Coke oven gas is being consumed in
the Thermal Power Plant and Turbo Blower station to generate
electricity for PS.
Iron Making Plant
The Iron Making Plant has two blast furnaces, each
having a capacity of 1750 tonnes of molten iron per day. Independence
day of 1981 i.e. the 14th August was the red letter day when the first
blast furnace started its production. The second blast furnace also
started its operation on the Independence Day of 1984. The molten iron
produced by the blast furnaces feeds the pig casting machines and
steel converters for making pigs as well as blooms and slabs for the
manufacture of billets and hot rolled sheets. Pig Iron is used in
foundries for casting. Blast furnaces also produce 250,000 tonnes of
slag which has many a valuable uses for production of slag cement,
slag blocks and slag wool. Besides blast furnace gas is being utilized
for generating electricity in the Thermal Power Plant and Turbo Blower
Station.
Steel Making Department
The Steel Making Department has two Linz. Donawitz
Converters. Each converter has a capacity of 130 tonnes of steel for
which there is one bloom caster and two slab casters. Blooms of
260x260 mm sizes are used for making billets which are utilized for
manufacturing various steel products. The slabs of 150-200 mm
thickness and 700- 1550 mm width sizes produced at the Steel Making
Department are fed to the Hot Strip Mill where they are rolled into
strips, sheets and coils etc. The first converter was commissioned on
18th December, 1982, the bloom caster on 22nd December 1982, second
converter on 17th February, 1983, first slab caster on 10th August,
1983 and the second slab caster on 1st November, 1983.
800 mm Billet Mill
The 800 mm Billet Mill was commissioned on 11th
October, 1982 and it is operating on blooms produced at the Steel
Making Department. PS billets are rolled in the rolling mill with very
close tolerance and high surface finish.
The steel for billets is melted in basic oxygen
converter using high grade pig iron and latest techniques of oxygen
blowing, thus resulting in the highest quality of "clean
steel" free from harmful effects of injurious elements.
Billet Caster
The Billet Caster is the first step towards the
expansion programme of the PS. It started production in November 1989.
Before this the billets were produced by rolling
the blooms. This indirect method is, relatively more expensive for
making billets. The Billet Caster produces much more billets at a
lesser cost and with lesser wastage. The 400,000 tonnes/year capacity
Billet Caster has been set up in association with an Austrian firm at
a competitive cost of about Rs. 400 million and it enhanced the
production capacity of billets from 260,000 tonnes a year to 660,000
tonnes/year. Thus the share of billets of PS has also increased in the
overall domestic market of the country and imbalance in its product
mix has been removed to a great extent.
1700 mm Hot Strip Mill
The 1700 mm Hot Strip Mill is operating on slabs
produced at the Steel Making Department. It is producing hot rolled
sheets, coils and strips suitable for ship building and the
manufacture of pipes of small, medium and large diameter, bodies of
cars, buses and other vehicles, railway wagons, transformers, boilers,
big tanks, machinery, formed sections etc. The hot rolled sheets are
also utilized for the production of cold rolled sheets. It has a
designed capacity of 445,000 tonnes.
Cold Rolling Mill
The Cold Rolling Mill comprises cold reversible
mill of 200,000 tonnes capacity. Out of 200,000 tonnes of cold rolled
sheets, 100,000 tonnes can be converted into galvanized sheets, 10,000
tonnes into cold formed sections leaving a balance of 90,000 tonnes.
The Cold Rolling Mill operates on hot rolled sheets/coils produced at
Hot Strip Mill. Cold rolled sheets are used for production of
enamelled wares, bicycles, steel fabrication, steel
containers/drums/barrels, jerricans, vehicle/bus body, steel
furnitures, machinery/parts/products/appliances, oil and gas
appliances etc. Cold rolled sheets are also utilized for production of
galvanized sheets and black plates/tinplates.
Galvanised sheets are used for containers, trunks,
boxes, packets, steel shuttering, desert coolers,
construction/roofing, ducting equipment, appliances, panelling,
utensils, air-conditioners, water heaters, fresh water tanks etc. Cold
and hot rolled formed sections are used for steel fabrications,
furnitures, vehicles/bus bodies, building construction, miscellaneous,
machinery and equipments/parts, steel doors and windows etc. The
combined slitting units and hot rolled coil conveyor section of Cold
Rolling Mill were commissioned on 10th February, 1984 while combined
shearing unit and profile bending units were put in operation on 4th
and 28th April, 1984 respectively. The operation of main Cold Rolling
Mill units marked the completion of first phase of 1.1 million tonnes
of steel products.
Thermal Power Plant
Pakistan Steel's Thermal Power Plant has three
turbo-generators each having a capacity of 55 MW, and four boilers.
The first generator was started on 18th March, 1981 while the second
and third generators were switched into operation on 28th September,
1983, and 24th April, 1984 respectively. Gases produced by the coke
oven battery and the blast furnaces, as well as coal-tar obtained from
the Coke Oven & By-Product Plant are used in the Thermal Power
Plant to minimize the use of natural gas.
Tonnage Oxygen Plant
The Tonnage Oxygen Plant of Pakistan Steel
comprises of two independent air sepa~ion units for the production of
gaseous and liquid Oxygen and Nitrogen. Each unit is designed to
produce 250 tonnes of Oxygen and 135 tonnes of Nitrogen a day. The
designed production capacity of liquid Oxygen of the two units is 967
liters per hour per unit. The first unit was commissioned on 1st
November, 1982 and the second on 8th January, 1983. The cylinder
filling unit of the plant, with a filling capacity of 100 NM3 tonnes
per day each of Oxygen and Nitrogen gases is also functional since 7th
December, 1982.
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