HUGE POTENTIAL EXISTS FOR FOREIGN INVESTMENT IN STEEL SECTOR
Feb 04 - 10, 2008
LAHORE: Engineering Development Board (EDB) organized a workshop in Lahore on "Challenges and Way forward in Steel Sector of Pakistan" in a bid to compile recommendations to help promote steel sector in Pakistan which is presently facing gap between demand and supply.
Addressing the workshop, Federal Minister for Industries, Production and Special Initiatives, Mr. Salman Taseer said the foreign investors are keen to invest in banking, real estate and telecom sectors but they should also invest in steel industry of Pakistan.
''Pakistan steel industry is a promising one and there is a huge gap in demand and supply thus the foreign investors can exploit the existing potential of this sector,'' he added. He also said the foreign investors would be ready to invest in expansion of Pakistan Steel Mills for enhancing its production capacity. He added that India has an edge over Pakistan in the steel industry because of good governance while its bank in abroad direct the flow of investment into India by guiding investors.
Secretary Industries, Production and Special Initiatives, Shahab Khawaja said that unfortunately we have ignored the steel sector and could set up Pakistan Steel Mills production capacity of which has not been enhanced. Presently, China and India are buying steel on a large scale that pushed its prices very high internationally. The situation will not be improved unless we will develop local resources.
Pakistan Steel Mills Chairman Maj. Gen. (Retd) Muhammad Javed while addressing the workshop stressed the need for developing local resources so that dependence on imported raw material could be minimized. He said that local iron ore and coal should be explored so that raw material could be provided to the steel industry from the local resources. Presently, we are buying coal from Australia and Canada and iron ore from India and China. However, Pakistan Steel is going to sign an agreement with the Sandac project on January 29, for the purchase of 50-60 thousand tones of iron ore, he said adding that purchase of 15,000 tones of iron ore from Chagi has also been started on experimental basis which could be enhanced up to 150,000 tones. Similarly, we are procuring coal from Loralai in Balochistan and quantity is likely to cross 50,000 tones by the end of this June, which would be increased up to 100,000 tones gradually. Coal is also being procured from Dera Ghazi Khan District on experimental basis.
Pakistan Steel has initiated a step toward procuring local raw material for its steel production which is a good step in right direction, he maintained.
He urged the business community to engage Geological Survey of Pakistan for conducting thorough survey for identification of coal and iron ore deposits within the country as it needs low investment but yield good margin.
He said the Pakistan Steel Mills is a commercial entity and produces to earn like any private enterprise. Clarifying to the participants, he said that 95 percent of the billets production is consumed by consumers and five percent by the traders/dealers. We can not police or inspect the use of billets provided to the consumers; however, any specific complaint on the zonal authority would be redressed on priority basis.
EDB Chief Executive Officer Almas Hyder said that earlier EDB role was restricted to steel and auto industry but now the government has assigned addition task for enhancing EDB role to energy and telecommunication sectors so that energy crisis could be overcome on permanent basis. EDB is going to appoint foreign consultants for identification of iron ore and coal sites in Pakistan, the volume of investment required for their exploration and future prospectus, he added.