INVESTMENT FLOWS INDICATE ECONOMIC POTENTIAL
Sep 19 - 25, 2011
Although the flow of foreign investment has slowed down in the face of disturbed conditions primarily due to side effects of war on terror, and infrastructure issues especially energy crisis, continuous flow of foreign investments in the areas of oil and gas exploration, Thar coal and wind power projects besides automobile and steel industry are indicating towards strong economic future of Pakistan.
Despite the fact that the country is entangled with a variety of issues particularly the security and infrastructure issues, it is the strategic location of an irresistible attraction to the foreign investors.
Currently, a Japanese trade delegation is on a visit to Pakistan with a focus to explore business opportunities and make joint ventures in certain industrial areas. Japanese Yamaha motorcycle, much popular brand in Pakistan, has finally come to Pakistan to produce their brands locally.
The international player in oil and gas exploration is also aggressively active in oil and gas exploration including offshore exploration. The US based international energy players are also on their way to arrive with a will to overcome the chronic issue of energy shortage. Similarly, Iran has also extended its support at a massive scale to address the energy crisis in Pakistan.
POSCO SIGNS JV WITH ALTUWAIRQI STEEL
Last week also marked an important development of a joint venture signed between Saudi Arabia's largest private sector steel manufacturer Al-Tuwairqi Holding and the world's third-largest steel maker by market value POSCO at the Sindh Chief Minister House. This joint venture between Tuwairqi Steel Mills Limited (TSML) and POSCO will bring an investment of US$15 million equity in TSML.
The agreement was signed by Dr. Hilal Hussain Al-Tuwairqi, Chairman Al-Tuwairqi Holding and Joon-Yang Chung - Chairman / CEO POSCO in the presence of Minister of State, Saleem H. Mandviwalla; Tariq Barlas - Vice Chairman / CEO Al-Tuwairqi Holding; BAEK, Sung-Kwan - Executive Vice President / Overseas Investment POSCO; Zubair Motiwalla - Chairman Sindh Board of Investment and Younus Dagha, Secretary Investment, Government of Sindh.
It may be recalled that the JV agreement is the result of chief minister's visit to Korea earlier this year where he visited headquarters of major Korean business houses, which included POSCO, KOSPO, Lotte and others. It is a testimony of initiatives taken by Sindh board of investment, which are bearing fruits in such a short period.
Senior Minister Sindh Pir Mazharul Haq was of the view that this agreement would not only create new job opportunities in Pakistan but also enable transfer of technology in the industrial sector. He expressed his satisfaction on the ongoing progress of Al-Tuwairqi's project in Pakistan and termed this joint venture as the catalyst for industrial development in the country.
Minister of State, Saleem H. Mandviwalla said, "The collaboration of two foreign investors puts synergy into the project and will greatly help in augmenting the efforts towards the forward and backward integration of the project." He further said, "POSCO in Pakistan will be a great success not only in monetary terms but its position as a technology leader in the steel sector from which Pakistan can benefit to a larger extent. The gap between demand and supply is met through imports and it is expected that the demand for steel products will be around 18 million tons against the supply of around 10 million tons in the year 2015.î
Zubair Motiwala informed that serious interest has been shown by leading Korean companies to invest in Thar Coal, wind energy, tourism and other infrastructure projects being offered by the government on guaranteed return on investment basis. He briefed that the steel sector of the country offers a scads of opportunities for the investors both local and foreign, as the current local production capacity caters to only 40 per cent of domestic market needs.
Subsequent to commercial operation of the DRI project, POSCO and TSML shall focus on upstream and downstream production processes, involving Long/Flat Products Project and Iron Ore and/or Beneficiation & Pelletization Plant Project. The DRI plant technology has been sourced from the world renowned American company named Midrex Technologies Inc (a subsidiary of KOBE steel of Japan).
Presently the plant, having a capacity of 1.28 million tons per year, is at a stage of 96 per cent completion and is targeted for commercial production in December this year.
Speaking on the occasion, Dr. Hilal Hussain Al-Tuwairqi said, "This agreement will not only further strengthen the bond among the companies but also the countries these organizations are representing to. We are hopeful that this is the beginning of a long lasting relationship between ATH and POSCO and it will also help build trust of more foreign investors in the country.
Joon-Yang Chung said, "We have ambitious plans for Pakistan as part of our long term vision for the country," He also took into account the current scenario of the Pakistani steel sector, which indicates a huge growth potential in this industry. "The country's geographical location offers immense opportunities to the investors and we are keen to capitalize on that," he concluded.
A day earlier, chairpersons of the two world's most prestigious steel sector conglomerates called on the Prime Minister of Pakistan Syed Yousuf Raza Gilani and discussed the overall business environment of the country, investment policies of GOP, and matters specific to TSML. Prime Minister assured them of the support of GOP in all the matters.
POSCO is the world's third-largest steel maker by market value and Asia's most profitable steelmaker. It has been the bedrock of Korea's industrial development over the past 40 years. The Korean shipbuilding and automobile industries primarily are dependent on POSCO for their steel requirements. POSCO produces some 33.7 million tons of steel products each year. Currently, POSCO ship those products to over 60 countries around the globe, satisfying some of the world's most quality-sensitive manufactures.
About Al-Tuwairqi Holding: ATHC, emerged in 1977 on the map of Kingdom of Saudi Arabia, has now become the largest privately owned steel organization in the Middle East and is now expanding its presence beyond the Middle East region engulfing parts of South Asia & Europe. ATH has shown phenomenal growth over the last two decades and is among the top five private sector industrial concerns in the Kingdom. In cognizance of its efforts, ATH has been awarded "Best GCC Industrial Development Company" by World Finance 2011 GCC Awards.