Pakistan Steel

AN INTERNSHIP ON PAKISTAN STEEL
THE ISLAMIA UNIVERSITY BAHAWALPUR 1

PREFACE
The good name and fame associated with business graduates are
attributed to the food high level of studies, both inside the classroom and in
practical field environment. This aspect has made them prominent among
other students. The students of business administration are not restricted
to the bookish neither teaching nor they are required to become cramming
parrots. They are made to observe how theory is transformed into practical
and how bookish principal is applied to different situations. Our department
faculty believes the saying “practice makes a man perfect”. It immense
pleasure for me to compile a comprehensive report on the historical view.
Establishment, objectives, financial analysis and ratio analysis of the big
giant industry Pakistan Steel mills During MBA program, every student is
provided opportunity for internship I variety of trading, manufacturing, social
and service organizations.
I feel it privileges that my internship in-change and placement selected
for me internship in the Pakistan Steel. For completion of my internship I
stayed at head office of the company in Karachi. I made studies on
different department of the organization. I conducted the financial and
ration analysis of the organization of last five years. Company Staff
cooperation with me was appreciable. They provided me all relevant
information that helps me to complete the report successfully. I also study
that how the different sections perform their activities. During my study I
saw that the organization is making immense activities to meet the steel
requirements of the country and to make good environment of competition
in steel sector. The company has renders all type of services to satisfy its
customers. I am not hesitating to say that I really learned a lot about the
company during my assignment as internee.

Acknowledgement
I am very thankful from the core of my heart to honorable

chairman Pakistan steel Mr. Mueen Aftab Sheikh for providing me
opportunity for training and who’s intelligent, wise and sound
leadership has converted manpower in to wining combination by this
industry into a gold mine.
I wish to express my deep gratefulness to Qaisar Saleem PEO
(HRD) for his consideration and supervision. It was a memorable time
in Pakistan Steel due to his kind concern. I am also thankful to Mr.
NISAR A KHOWAJA/incharge HRD and Mr. YOUSAF AYOUB for his
precious advice and for the great encouragement and cooperation,
because of which I have successfully completed my internship
training at Pakistan Steel where I learned a lot.

TABLE OF CONTENTS
Serial # Description Page #

01 Executive Summary 05
02 Introduction 06
03 History 07
04 Vision and mission 09
05 Objectives 10
06 Quality 11
07 Departments visited 12
08 Administration and Personnel 13
09 Industrial Relations Department 16
10 Marketing Department 19
11 Finance Department 23
12 Accounts Department 27
13 Purchase Department 29
14 Conclusion 31
15 Suggestions 32

EXECUTIVE SUMMARY
Prior to detailed description, I am stating the summary of
internship report. Basic purpose behind this is to give a clear view of the

report and about the efforts that have been taken to complete the program.
I were assigned Pakistan Steel to work there as internee for the practical
exposure. My job was started from june17, 2009 to July28 2009 with aim to
study each and every aspect of organizational setup departmental working
and the working process and the documentation proceed by the giant
organization. The multibillion-rupee project of Pakistan steel is not only
fulfilling the steel requirements of the country but also offering different
training programs to its employees but also the students from different
universities of different subjects. I being the student MBA was deputed in
Administration and personnel, Marketing, Audit, Industrial relation, Law,
Finance and Account to observe the functioning of these departments.
The report in hand consists of my six weeks experience

during internship. The report starts with introduction of the organization,
which covers detailed history and background, production capacity and
products downstream industry, organizational structure and some other
important aspects. After there are functions performed by different
departments working in the organization. Financial statements and
financial analysis of Pakistan steel is also an important component, which
reflect the performance of the organization.
As we all are aware that development and growth of any

country is largely dependent upon the iron and steel industry. So the
improvements and development of that industry is of much importance for
any country and especially the developing countries like Pakistan. Pakistan
steel is working well in less resource but due to our political structure is
disturbing the strategies of Pakistan steel. Pakistan steel has a great
beneficial effect on national economy. It has instrumental in creating new
job opportunities. It is the base for downstream industry in the country. The
Pakistan steel re cognize the staff welfare and gives it due importance as
well. It has arranged the residence for its employees and introducing the
new scheme for their welfare.
INTRODUCTION
The engineering goods industry is recognized world over as most critical

for the development of a self reliant and vibrant economy. This industry,
however, depends heavily on basic metals, especially Iron & Steel as resource
inputs. The Iron & Steel industry, therefore holds the key for sustained growth of
the engineering sector and hence for development of the economy as a whole.

As such the steel industry can be termed as “Mother industry” to all modern
industries, being the basic source of metal for them. In this, prospective the
importance of national assets such as Pakistan Steel which is determined on
their strength and ability to sustain the national growth rate, need not to
emphasized. Abundant steel sufficient power adequate transports are otherwise
industrialization of developing countries today.
The construction of Pakistan steel was started from 1973 and completed
at a cost of 24700million rupees. Pakistan Steel today is the biggest industrial
undertaking having production of 1.1 million tons of steel. The management of
Pakistan steel has taken serious decision to restructuring of Pakistan steel mills
for increasing their savings. To serve they announced V.R.F to their employees.
They do this because they want to reduce the strength of employees who are
now at the end of their fobs. Pakistan now and all the time is the industry that
can provide millions of rupees per month but by good way. So through new way
they not only reduced production cost but also can increase the savings.
Located some 40 kilometers to the East of Karachi, Pakistan Steel and its
related facilities are spread over an area of 18,600 acres, or about 29square
miles. The construction of complex involved the use of 1.29 cubic meters of
concrete, 330,000 tonnes of machinery, stee structure and electrical equipment,
and the employment of over 40,000 workers at the peak of construction.
In January 1971 the government of Pakistan and USSR signed an

agreement, the latter undertaking to provide technological and financial
assistance for the construction of a coastal based integrated steel complex. The
total capital cost ot project is estimated at about Rs. 1407 billion.
Designed to yield an annual production capacity of 1.1 million tones of

steel, the Pakistan steel which was the outcome of collaboration between former
USSR, and Pakistan signed a historic agreement under the terms of which the
former agreed to provide techno financial assistance for the construction of a
coastal based integrated steel complex.
It took some time for a follow-up action after the signing of the agreement
that did not come up till 1976. but once the spade work had taken shape, the
auxiliary work was completed in record time.
The first coke oven battery was commissioned in April, 1981, the Billet Mill
in October, 1982,, the tow converters, one bloom caster and two slab casters of
steel making plant between December, 1982 and November 1983 the hot strip
mill in December 83, the second blast furnace in August 84, the cold rolling mill in
December 84, and the Galvanizing unit in August85 another unit, Billet caster
was added in November 1989.

For a person of modest qualification in earth science, computer,

electronics and metallurgy it is not easy to understand the complex nature of the
function of the Pakistan steel. One has to be an in-person, totally absorbed with
the process of the mill to understand the complexities of the job. And for some
valid reason, in more than one ways, the Pakistan Steel is a next century
venture that is being constantly modernized to keep steps ahead of its time.
Some of the main products of Pakistan steel are coke(215000 tones per
year) cast billets (135000tonnes per year) rolled billets (260000 tones per year)
pig iron (135000 tons) hot rolled sheets/coils (445,000 tones per year) cold rolled
sheets (90000tonnes per year) galvanized sheets/coil (100,000tonnes per year)
and formed section (120000tonnes per year).
Since Pakistan steel is based on imported raw materials, a special jetty

has been commissioned by the port Muhammad Bin Qasim Authority for
Pakistan steel. All imported raw material, viz. iron ore, coking coal and
manganese, is transported to the main plant 4.3 kilometers away through a
conveyor belt. The same job if done through conventional methods would have
taken hundreds of trucks and many thousands of man-hours. For unloading of
the4 raw material from ships, two unloaders of 1000 tones an hour capacity each
has been installed at the jetty by Pakistan Steel.
The multi-billion rupee Pakistan steel has opened a new vista of

opportunities for a long line of dealers, sub dealers and agents who operate as
outlets of Pakistan steel throughout the country.
A number of the products of Pakistan Steel have sprung up in its vicinity

and in many parts of the country.
Abundant steel, sufficient power and adequate transport are absolute

necessities for rapid industrialization of developing countries. If one desires to
find out what Pakistan steel or for that matter Tarbela Dam, has done for country,
one will have to venture back into time, into the early 70s when Pakistan steel
was only a sketch on the drawing board.
It took Pakistan steel just a couple of year to overcome the teething

problems. Its recently improved qualitative performance is now a matter serious
discussion beyond Pakistan. The quality durability and fineness of its wide range
of products has been acknowledged in the region, so much so that the
production of the mill has been soaring at a rapid rate, achieving 100% level
successively in March, April and May, 1996.

HISTORY
After independence in 1947, it did not take long for Pakistan to would be
impossible without the possession of a self reliant iron and steel making plant.
The dependence on imports would cause serious setbacks to the country along
with an extortionately high import bill which would be impossible to support.
The initial idea for a domestic iron and steel mill was put forward in the
first five year plan of Pakistan (1955 - 1960). Debates over the manufacturing
process, supply sources of the requisite machinery and raw materials, plant site,
domestic ore versus imported ore, ownership pattern, product mix and above all
foreign financing credit kept the project on hold for a considerable time.
In 1968 besides other factors, it was considered by the Government of

Pakistan that a basic steel industry should be established in the public sector, as
public sponsorship of the project would enable integrated development of the
steel industry in the country. In light of this, the government decided that the
Karachi Steel Project should be sponsored in the public sector for which a
separate Corporation under the Companies Act be formed. As a result on the
2nd of July, 1968 Pakistan Steel Mills Corporation was setup as a private limited
company in the public sector in accordance to the Companies Act of 1913, with
the objective to establish and run steel mills at Karachi and other places in
Pakistan.
In January, 1969, Pakistan Steel concluded an agreement with V/O

Tiajproexport of the then USSR for the preparation of a feasibility report into the
establishment of a steel mill at Karachi. Subsequently in January, 1971 Pakistan

and the USSR signed an agreement under which the latter agreed to provide
techno-financial assistance for the construction of a coastal based integrated
steel mill at Karachi.
The foundation stone for this gigantic project was laid on the 30th of
December, 1973 by the then Prime Minister Mr. Zulfiqar Ali Bhutto. The
mammoth construction and erection work of the integrated steel mill, never
experienced before in the country, was carried out by a consortium of Pakistani
construction companies under the supervision of Soviet experts.
................................................................
Pakistan Steel did not only have to construct the main production units but
a host of infrastructure facilities involving unprecedented volumes of work and
expertise. Component units of the steel mill numbering over twenty and each a
big enough factory in its own right were commissioned as they were completed
between April, 1981 to August, 1985 with the Coke Ovens and By Products Plant
coming online first and the Galvanizing Unit last. Commissioning of Blast
Furnace Number 1 on the 14th of August, 1981 marked Pakistan's entry into the
elite club of iron and steel producing nations. The project was completed at a
capital cost of Rs. 24,700 million. The completion of the steel mill was formally
launched by General Zia-Ul-Haq the then President of Pakistan on the 15th of
January 1985.
Today Pakistan Steel is the country's largest industrial undertaking having

a production capacity of 1.1 million tones of steel. The enormous dimensions of
the project can be visualized from the construction inputs which involved the use
of 1.29 million cubic meters of concrete, 5.70 million cubic meters of earth work
(second to Tarbela Dam), 330,000 tones of machinery, steel structures and
electrical equipment. It’s unloading and conveyor system at Port Qasim is the
third largest in the world and its industrial water reservoir with a capacity of 110

million gallons per day is the largest in Asia. A 2.5km long sea water channel
connects the sea water circulation system to the plant site with a consumption of
216 million gallons of sea water per day.
Pakistan Steel did not only have to construct the main production units
but a host of infrastructure facilities involving unprecedented volumes of work
and expertise. Component units of the steel mill numbering over twenty and
each a gig enough factory in its own right were commissioned as they were
completed between 1981 to 1985 with coke oven and By product plant coming
on stream the first and the Galvanizing unit the last. Commissioning of blast
furnace No. 1 on 14 august 1981 marked Pakistan’s entry into the elite club of
iron and steel producing nations. The project was completed at a capital cost of
Rs. 24700 million. The completion of the Steel Mills was formally launched by
the president of Pakistan on 15 January 1985. Pakistan Steel today is the
country’s largest industrial under-taking having production capacity of 1.1 million
tones of steel.
The above figures illustrate the massive civil works, intricate erections,
installations of sophisticated electrical and mechanical equipment. With the
completion of Pakistan Steel, the local contractors gained the technical ability till
then unknown, which they utilized later to undertake million dollar projects both
within the country and abroad especially the Middle East.

Our vision
To become a leading steel company in south Asia committed to serving stake
holders by offering quality products through an innovative and cost effective
manner in accordance to environmentally friendly conditions.
Our Mission
Pakistan Steel is committed to be a leadering steel industry by:
1 Greater response to customer's present & future needs.

2 Focus on productivity and Quality.
3 Facing Challenges of free Market Economy.
4 Ensuring higher rate of return on invested capital.
Developing Human resource and motivating employees’
5
.through .empowerment and hard consequences.
6 Safe Working and Environment friendly conditions.
7 Minimizing process wastages, rejections and recycling .wastes.
8 Good Governance.
9 Fulfilling Social Obligations.
10 Improving Corporate Image.

OBJECTIVES
1. Development of corporate culture and good governance characterized by

participation, consensus, orientation, accountable accountancy,
responsiveness, effectiveness, and efficient observance of rules of law.
2. Keeping a constant eye on bottom lone to maximize profit and race.
3. Acquiring and employing technology through research and development for
increasing productivity and quality to reach DPR levels in 3 to 5 years.
4. Aiming at TQM system by 2010 by making quality.
5. Ensuring cost competitiveness by offering 1% annual investment I yield
wherever required.
6. 10% annual reduction of inventory till achieving level of 4-6 weak productions.
7. ISO certification by December 2002.
8. Orientation and commitment of employees to the mission by 2002.
9. Promoting indignation by facilitating use of 5% raw material by 2003.
10. 10% increase in recycling of wastes by 2003.
11. Eliminate goods in transit by following better procurement policies by 2003.
12. Attaining designed values of consumptions of utilities by December 2003.
13. Introduction of next level of automation by 2005.
14. Diversification of product mix through BMR by 2006.
15. Phase wise expansion up to 3.0 million tones of raw steel by 2012

LOCATION AND SITE

PAKISTAN STEEL is located at a distance of 40km South East of Karachi
at Bin Qasim in close vicinity of Port Muhammad Bin Qasim. It was found to be
an ecologically preferable location, alongside a tidal creek and having wind
direction away from the city of Karachi. PAKISTAN STEEL is spread over an
area of 18,660 acres (about 29 squares miles) including 10,390 acres for the
main plant, 8070 acres for township and 200 acres for 110 MG water reservoir.
In addition it has leasehold rights over an area of 7520 acres for the quarries of
limestone and dolomite in Makli and Jhimpir areas of district Thatta.
EMPLOYMENT OPPORTUNITY
PAKISTAN STEEL provides employment to more than 14,500 person on regular
basis whereas about 3000 daily wage workers and retainers are engaged on
piece job basis including capital repair and emergency works etc, at different
complex of PAKISTAN STEEL. During the construction phase about 40,000
persons were engaged. With the establishment of down stream project about
25,000 persons were provided job opportunities while an equal number of
persons obtained employment indirectly.

QUALITY
We at Pak Steel, strictly adhere to the ASTM and BSI international

standards. For this purpose we have established most modern laboratories to
maintain the highest quality precision standard. The perfection of our work has
captured the sharp eyes of discerning clients, in the public and private sector
including some of the top multinational construction firms. To produce high
quality steel according to the requires specification, Pak Steel is equipped with
both chemical and physical laboratories at our site in Islamabad. Prime Quality
M.S billets are processed through semi-automatic re-rolling plants, which are
designed to manufacture standardized products of exact and international
specifications; special attention is paid to the custom requirements instruction of
each particular client. Various holding concerns of this group, led by M.S Pak
Steel Re-Rolling Mills are prominently known for quality and dependable
manufacturer of steel products like: Mild Steel Round – Plain Bars, Deformed
Bars, Square bars, and High Tensile Cold Twisted Bars, Angles, T-Iron,
Channel, Flat and other sections. Beside these we have potential to meet special
requirements of our customers.
The melting plant used for casting & ingot manufacture, is a high
frequency, totally computerized electric furnace, manufactured by world re-
owned “Inductotherm” U.S.A. However, our main source remains prime quality

billets manufactured by Pakistan Steel Mills Corporation, Karachi and Heavy

Mechanical Complex, Texila.
Pak Steel is the first steel industry in the region to operate Cooling Beds in its
factory, thus ensuring precision and quality in the finished product. This
enhanced technological feature guarantees the optimum straight, shaft like finish
of our products. Similar unique innovations & automation in the manufacturing
process enable us a present production capacity of 45,000 MT per year. Adding
additional shifts may increase thin.

DEPARTMENTS VISITED
Industrial Relations Department
Administration and personnel
Marketing Department
Purchase Department
Accounts department
Finance department
Numbers of Main Products List of By Products
1. Pig Iron. 1. Oxygen
2. Billets products. 2. Tar Cool
3. Galvanized products. 3. Granulated Slag

4. Hot rolled products. 4. Boulder Slag
5. Cold rolled products 5. Refractory Bricks
6. Coke 6. AMMONIUM
SULPHATE
7. Formed Section 7. Nitrogen
Administration and personnel department is responsible for overall

administrative and personnel matters in accordance with the policies, rules
and regulations including welfare of employees. The following are the
various section of A & P Department.
A. Personnel ‘A’ Section:
This section deals with maintenance of personal files of all officers
from deputy Manager to general managers grade including the personal
files of the officers of those departments who have not been delegated the
administrative powers, issuance of NOCs / Leave enhancement /
Coverage of insurance claims, etc.
B. Personnel ‘B’ Section:
This section deals with maintenance of personal files of employees
in workers from pay group-I to pay group-V and of those departments who
are not having admin. Powers. All others functions are same like the
section ‘A’.
C. Leave and complaint Section:

This section deals with maintenance of leave records of all the

officers and issues leave advices of the officers from the level of
managers to deputy general managers grade including of those
departments who have not been given authority. Also deals the files of
employees posted in A&P department and coordinates with FIA with
regard to different corruption cases under investigation and to computerize
the data statements in this connection.
D. P & C Section:
Policy and Coordination section is the main part of A&P department
where policies and rules and regulations of officers & workers including
DPC promotion list are maintained. All management policies are
implemented in Pakistan steel through this section. It also deals with top
management cases as well as routine matters.
E. Establishment Section:
This section deals with issuance of sanctioned strength of the
departments complexes and maintains up to date organizational charts,
transfer, posting of employees according to the manpower requirements.
Grant of house building, house purchase conveyance loans. This section
also deals with outside agencies like national assembly questions senate
questions correspondence with ministry president of Pakistan.
F. ACR Section:
This section is the custodian of the ACRs of the officers with
declaration of assets submitted by them during the year. Also
communicates the adverse remarks endorsed by the reporting officers to
the concerned employees.
G. Enquiry Cell:
Enquiry cell deals with initiating necessary disciplinary actions
against the officers involved in misconduct corruption cases, carrying out

investigation and examination of enquiry reports of the completion of

disciplinary cases as per Pakistan steel officers service rules and
regulations.
H. Dues Settlement and Verification Cell:
This cell is established to facilitate the ex-employees as well as
dependents of deceased employees for settlement of their final dues
through accounts departments / provident fund gratuity fund.
I. EOBI Section:
This section deals with extending EOBI coverage to our entitled ex-
employees and payments of monthly EOBI contribution to concerned
authorities.
J. Reprographic Center:
Reporting center arranges all types of printing for Pakistan steel. It
also arranges printing of Al-Hadeed Khabarnama as and when required.
Quality Policy of Administration &

Personnel
Administration and Personnel department commits to:

• Manage and care the employees for better productivity, organizational
growth.
• Appropriate staffing according to work requirements.
• Maintain quality of work life.
• Strive for corporate culture improvement.

The general function of industrial relations department is to create

healthy and harmonious relationship between the management and
employees to maintain industrial peace. I.R department is basically
Welfare department, which has been administratively divided into six
sections. Each section is performing its functions very well.
1. Trade Union:
Its specific function is to deal with the trade union and associations
working in Pakistan Steel. This section conducts union referendums and
negotiates with CBA on CBA charter of demand. There are 12 registered
trade unions and 03 officers associations functioning in Pakistan Steel.
Now a days PPP Pakistan peoples party’s recommended party PEOPLES
WORKER UNION in power. After 12 years a referendum held in Pakistan
steel in which PWU gets 4700 votes out of 5100. According to law if a
party not get one third votes in referendum it will be freeze so all other
parties are freeze now days and only one party is in working and that party
win the hearts of workers a charter approved by Pak steel is only for
workers welfare after the approval of that charter even some officers are
getting less or equal salaries than workers.

2. Compensation:
This section deals with group insurance, workers compensation

and workers welfare loan cases. During last 06 months 15 deaths 10
accidents and 1773 loans and hire purchase from Pak steel were deals
with. Further Rs 70000 is given to worker on the wedding of his daughter
from Pak steel which is allowed twice in his service. More Pakistan steel
offer the scholarships for the sons of workers which is
Class Amount
Intermediate 12000/year
Graduation 18000/year
Post Graduate 24000 /year
02 Uniform, two pars of Shoes a set of books and school bag is also
provided by Pakistan Steel.
A sewing machine is also gifted to worker once in his experience.
3. Welfare Section:
This section has 05 Subsections

A. Catering
It is obligatory to provide canteens facility to the employees
at their working places. The employees are provided food on
subsidized rate which is one sixth Pakistan Steel has established
19 canteens at different complexes keeping in view requirement of
the employees and Rs 1300 laces are recommended annually for
this purpose.
B. Welfare loan
Rs 60000 are given to workers as a loan only on the basis of
his identity card of Pakistan steel which is deducted from their
salaries in 60 equal installments without any interest.
C. Hire purchase
House appliances are also offered to employees on
installments basis. Pak steel sign contracts with different dealers
and shopkeepers to provide the facility of hire purchase to workers
at minimum interest rate. For example 0% interest for 06monts
04% 12months 08% more than 12months.
D. Public Library
A public library under IR has been established in steel town
for the employees residing in steel town and Gulshan e Hadeed.
There are 3000 books in that library.

E. Workers Camps
Workers camp is consists of 31 barracks and each barrack is
consists of 4 rooms. Total accommodation is 700 beds.
04: Administration Section
This section deals with overall administration of IR.

Department. Imprested account is also dealt with this section.
05: Religious Affairs Section
It is functioning under Chairman Communication. The employee’s

contribution is in the form of mosque funds. Rs.100 by officers and Rs 50
by the workers every month. All religious affairs are dealt with mosque
committee. It is consists of 04 members of CBA and 04 members of
administration. It deals with the following matters.
• Arrangements of religious functions
• Repairs and maintenance of 30 mosques.
• Annually procurement of mosques items.
• Arrangements of Taravih, Eid prayers.

SIMPLIFICATION OF PORCEDURE
The function of Marketing Department is to optimize the sale revenue in

order to achieve the organizational objectives by adopting affective Marketing
system to sell Pakistan steel main products and by-products at the best
achievable competitive prices.
To achieve targeted sales directed towards attaining organizational

objectives, a board based sales policy is adopted which provides the guideline
for the Marketing department as well as the customers. The sales policy, by
implementing the standard terms and conditions of sales contracts safeguards
the interests of Pakistan steel as well as its customers in a balanced way.
Customers i.e. traders and consumers (especially industrial consumers) play a
pivotal role in the sale of Pakistan steel products.
PREPARATION OF SALES POLICY
The sales policy of Pakistan Steel is prepared with immense care and
vigor on the basis of past experience and achievements keeping in view the
customers demand and market conditions. It reflects the plus points of the
previous Sales policies and maturity of policy makers. Sales policy is the result
of hectic efforts of marketing personnel who carryout in depth survey/study of the
market and keep vigilant eyes on the changing domestic as well as international
Iron & Steel markets. While making the sales policy, due care is taken to the
future need of Pakistan Steel and its relations with its customers.
Sales policy is placed before the Price Fixation and implemented after due
approval.

PRICING
The prices of Pakistan steel products are fixed by a price Fixation/review
committee comprising:
• Chairman
• Director (Finance)
• Director (Marketing)
Since the production of Pakistan steel products are based on imported raw
materials, the prices are subject to change without notice. While reviewing the
prices of products, following factors are taking into consideration:
• Market conditions
• Market Acceptance
• Protection against imports
• Competitors
• Landed cost of imported materials
• Government fiscal policies
• Production & Quality range
• Cost of production
DEALERSHIP SECTION
This section is assigned following jobs:

i. Entertain various dealership applications.
ii. Point out deficiencies in respect of each application.
iii. Prepare the summary of case for the approval of GM/in charge (Sale),
Director (Marketing) and the Chairman.
iv. Maintain close liaison with Sales Accounts department for the issuance of
official receipts of security amount received on account of dealership.
v. Liaise with PSPS Department for obtaining the final clearance of any
dealer, who at any time request for cancellation of his dealership.
vi. Coordination with various Zonal Sales Offices fro refund of Security
deposit in respect of dealers.
vii. Maintain up-to-date record of Traders & consumers/Dealers (Zone wise).
Reply the queries received from customers, Government agencies Internal
and External Auditors and Ministry of Industries and Production.

DATA COORDINATION SECTION
This section perform the following functions
i. Maintain up-to-date record of computerized stocks of weighted and

outweighed
ii. Maintain up-to-date record of commercial dispatches of Pakistan Steel
products
iii. Prepare NORs for Zonal Sales Offices, after getting request for issuance
of NORs from respective product in charge.
iv. Maintain the price history of Pakistan Steel products.
v. Maintain up-to-date zone wise dealership list.
ON-LINE COMPUTER SALES
• The Zonal Sales Offices, organized on modern lines using computer

Facilities to promote Sales, provide one window operation to Customers.
• Available computer facilities have been utilized to develop “ON-LINE
COMPUTER SYSTEM” for the Production and Marketing & Sales
activities.
• The existing System has been made to work trouble free in the next
millennium.
ADMINISTRATION SECTION
This section is responsible for overall administrative functions of marketing

department and to perform following jobs:
i. Maintain the personal files in respect of officers, Staff, Retainer and Daily
wage Workers.
ii. Prepare the daily attendance.
iii. Prepare the monthly attendance of Officers Staff, Retainers and Daily
wage Workers.
iv. Liaise with Central administration in connection with issue of leave advice
leave balance and other administrative matters.
v. Look after the general maintenance of sale department i.e. Lighting,
Electric Fans, Air conditioners, White wash, Fixture and Fitting etc.
vi. Preparation of annual departmental budget including Zonal Sales Offices.
vii. Take care, of the stationary requirement of entire Sales department.
viii. Receipt and Dispatches of Letters/Dak.

ix. Correspondence with other department/Zonal Sales Offices of Pakistan

Steel.
RESEARCH, INTELLIGENCE & REBATE SECTION
This section is responsible to perform the following functions.
Market intelligence
i. Study various steel Journals and Newspapers to find out useful
data, information related to Iron and Steel Industries, their
gradual development and Marketing strategies.
ii. Determine demand of Iron and Steel products in the domestic
as well as international markets and fluctuation of prices thereof.
iii. Find out prospective/new buyers of Iron and Steel products.
iv. Keep record of international prices.
v. Keep track history of prices of Pakistan steel products.
vi. Keep record of domestic prices of Iron & Steel products.
vii. Keep record of ITP (Import Trade Price) value.
viii. Determination of landed cost of international prices.
ix. Submit papers/materials for review meeting.
x. Perform any official job assigned from time to time by the GM/ in
charge.
RESEARCH WORK
i. Provide timely and quality information to make timely and fruitful

decisions.
ii. To enabling Sales Department to achieve the sales target in line
with the general objectives of organization.
iii. Provide information concerning to ways and means to integrate the
resources and activities of the organization focusing on the need
and wants of customers as well as the organization.
iv. Monitor the needs of the market and anticipate the future demand.
v. Formalize systems for acquiring information for providing
assistance in understanding the market place and for the decision
making.
vi. Prepare replies to technical inquires from buyers and the Govt.
vii. Coordinate with Planning and PP&C department.
viii. Prepare replies to the inquires from Down Stream Projects. Prepare
replies to the news clipping related to Sales Department.

Finance is the lifeblood of economy and every business carefully manages

its departments to “Raise the funds at lower rates” and “and application of funds
to get maximum funds.” The finance department performs following functions.
i. Preparation and control of the budget

ii. Mobilization and procurement of funds both in rupees and foreign
exchange. Liaison with commercial banks, banking council, state bank
and ministries of productions, industries, finance and economic affairs
divisions.
iii. Arrangements of imports, letter of credit and forging remittances.
iv. Control on utilization of foreign and local credits and arranging repayments
f loan and payment of markup
v. Scrutiny and payments of soviet experts and other consultant’s
remuneration after obtaining S.B.P. approval.
vi. Financial scrutiny of estimates, awards, approval and negotiation
whenever directed.
vii. Financial scrutiny of all cases after finalization of the purchase proposal
letter of award whenever directed.
viii. All financial matters relating to operational activities.
ix. All financial matters relating to the purchase both local and foreign.
x. Submission of periodical returns to Govt. in respect of foreign loans
utilization.
xi. Development and review of procedure for financial and budgetary control.
xii. Correspondence with the lead bank in respect of running finance, medium
term loans and participation term loan.
xiii. Preparation of complex wise budget and allocation of funds.
xiv. Any other exercise connected with finance department from time to time
assigned by the management on the directives of the POI&P/ finance
division.
xv. Submission of periodical reports to Govt.

Cash section
Cash section management starts when order for purchase of raw material
or other goods is placed and ends when payment is realized from sales. All
these activities between these events fall when within the realm of cash
management. Cash management is the process whereby the cash inflows and
outflows are balanced so that current obligation is met in time and any excess
cash is invested to earn income. It also includes ability to obtain credit so that
the corporation can have access to cash to finance temporary cash deficits.
Rules and Regulations of Cash Section
• The function of handling receipts and payments is completely
separated under cash section. All transaction of receipts and
payments are accounted for in the books by other concerned
department.
• All disbursement is made by cheques on the instruction of dealing
department.
• Cheques are signed on the basis of approved invoices and
vouchers.
• Cheques are counter signed by the person outside cash section.
• After preparation of cheques supporting documents are endorsed
for this effect.
• Daily report of receipt, disbursement and balances available in the
banks is prepared. Cumulative receipts and payments for the
month are also shown.
BUDGET AND BUDJETARY CONTROL

SECTION
This section contains different cells which are performing there duties
separately these cells are following.
A. Preparation of budget
i. Consolidation of demands received from all production and service
units of Pakistan steel.
ii. Collection, compilation of latest rates of material from concerned
departments
iii. Firming up of expenditures based on estimated actual basis.
iv. Finalization of foreign exchange requirements.
v. Calculation of working capital requirements.
vi. Inventory position of raw material, spares, finished goods work in
process.

B. Import cell
i. Establishment of foreign and local letter of credit through
nationalized commercial banks.
ii. Scrutiny of purchase orders/ contracts /letters of awards received
for establishment of L/C specially its financial approval by
competent authority.
iii. Request the ministry of finance for release of foreign exchange on
monthly basis against total approved foreign exchange.
iv. Classification of code numbers according to import policy
v. Obtaining approval for the opening of L/C from state bank against
the suggested account.
vi. Submission of LC opening application from to bank.
vii. Checking of LC established by concerned bank.
viii. Arranging confirmation of LC from foreign banks.
ix. Preparation of cash voucher in respect of opening of LC.
C. Financial Scrutiny Cell

i. Scrutiny and examination of import cases received daily in finance
department for financial concurrence.
ii. The case so scrutinized needs through and active examination of
indent and its approval stock position based on record maintained
by our stores.
iii. Participation in tender opening in different departments.
iv. Checking of earned money in shape of pay order of bank guarantee
issued by approved banks.
v. Participation in meetings regarding prequalification of contractors.
vi. Participation of negotiation meeting with the suppliers
vii. Checking the authenticity of local agents in case the tenders are on
C&F basis.
Tow types of Budgets are prepared under finance

department observation.
 Capital Budget.
 Revenue Budget.
Capital Budget
Capital budget is the necessary one and is made for the
expenditures like, requirement of transport vehicle, Furniture and fixture,
office equipment, lab. And medical facilities, fire fighting, equipment, land,
plant and machinery, computers and the things like these essential items.

This budget is basically made for the expensive items and these are
basically development items for any organization.
Revenue Budget
The revenue budget is made for the routine things that should be
used to run any organization following heads comes under this budget
like, purchasing of local raw material, Gas, Electricity, labor salaries and
allowances and as well as foreign experts, items of production and related
material and services, administrative expenses, advertisement, rent taxes.
Traveling expenses, the items directly or indirectly or indirectly related with
production. Expenses on repair of rail, road, building and bridge.
Production, sales, cost of sales, profit and loss of each main complex to
arrive at the total profit of the organization.

The account department is working under the supervision of

Director (finance & Accounts). The accounts section of any organization is called
the base point for the provision of data. This department basically works for the
preparation of financial statements of the corporation, disbursement of the salary
to employees. Payments to suppliers/ contractors/ service provider and cash
management. All financial transactions are recorded, summarized and
consolidated in accounts department in form of:
A. Journals B. Ledgers C. Trial Balance D. Income statement E. Balance sheet

The department is divided to four sections for its smooth working those are:
1) Final Accounts
The main function of this section as appears from its name is to

finalize annual accounts of Pakistan steel. In addition to finalization of
annual accounts, monthly and quarterly are also compiled provisionally.
However few working groups in this section carry out other functions like
maintenance of fixed assets. Annual finalization of accounts is very
important because annual audit is based on the accounts for the year.
Final account section coordinates with external auditors to complete
statuary audit within stipulated time specified by the securities.
Following books of accounts are maintained by final account section.
A. General ledger
B. Trial Balance
C. Financial Statement
D. Balance Sheet
E. Cash flow statement
2) Bills Section
This section handle the all payment which are made by the
Pakistan steel mill to the contractors, dealers, suppliers, service provider,
transportation charges, Hadeed Welfare Foundation, and also for the
purchase of Raw material even from inside or outside of the country. All
the payments are made by this section.

3) Payroll Section
About 14000 regular 3000 contract and 2500 daily wages

employees are working in Pakistan steel. In order to control disbursement
of salaries and wages to them a full-fledged section is established. The
function of this section is,
• Allotment of personal numbers to employees to maintain
employees wise database on computers.
• Preparation of payroll as per attendance report received from cash
department.
• Crediting the salaries in the account of employees with banks.
• Maintenance of employees loan and advances accounts
• Issuance of instruction to release or stop the salaries.
• Preparing vouchers for any payment or deduction to and from
employees like final settlement etc.
• Deduction if income taxes at source and deposition on govt.
treasury.
4) Gratuity and Advances
Maintenance of Pakistan steel gratuity funds trust accounts.

Payments of gratuity of officers and staff on their final settlement. Cash
management of funds available with gratuity fund trust and audit of
accounts.
Advances Release of funds to imprested holders, special advances
and adjustments thereof on receipt of accounts. TA/DA advances and
reimbursement of officers proceeding on official tour.

Purchase department deals the all functions of purchasing of all

material which is need to any department of Pakistan steel for the purpose of
production or any other expense which is required by the department. The
needy department send the indent to the Material Management Department
(MMD) and after approval and necessary requirements they send the demand to
purchase department and than the duty of purchase department is start if the
required purchasing is less than one lack than purchasing function is so easy one
person go to the market and received three price descriptions and select the
lower one for purchasing. On the other hand if the purchasing is more than one
lack a proper procedure of tender is adopted.
Purchase department consist on five sections which are named by
CP1 to CP5 different types of products are dealt with different CP and also has
some other sections i.e. tender and import section is also held in purchase
department. All the procedure of purchasing is almost same in all CP’s but
products allotted to each Central Purchase are different. Descriptions of all
Sections are following.
Central Purchase 01
It deals all the electric items which are purchased by the steel mill for any
purpose i.e for plant or establishment.
Central Purchase 02
It deals all the Chemical products and vehicle which are need to any
department of Pakistan steel mill
Central Purchase 03
It deals for the purchase of hardware and wires, ropes when need.
Central Purchase 04
It deals with boring pipes purchasing and central fitting.
Central Purchase 05
Petrol, oil and lubricants are purchased under this section.
Spot Purchasing Section

Sometimes spare part of plant is needed urgently for which other

documentary is not necessary because it may delay the purchasing and that
delay may be loss of unbelievable accident or stop of production etc. So if
production plant need any plant material it will be purchase with in twelve hours
after the indent.
Purchasing Procedure
• First of all needy department sent the indent to MMD and show the
requirement of material.
• MMD sent the requirement to purchase department.
• Purchase department allot the number to that case and sent to
news release department for the tender advertisement.
• They publish this advertisement in minimum tow newspapers as
per government rule.
• Than purchase distribute the tender form to all wiling parties.
• Tow types of envelops are required from the bidder person first is
Technical and second is Commercial.
• 2% Bid Bond Security in shape of security is received with the
commercial envelop.
• Fist technical offer is opened if the tender is less than ten lack both
offers are opened at the same time.
• If the rate is too high than last purchase than rate reasonable
committee RRC will handle the case in shape of market research
and market survey and put the decision about pricing.
• When first lowest is selected 2% BBS is returned back to the
supplier and 10% Guaranty is required to submit inform of pay
order or bank challan to the account of Pakistan Steel’s account.
• All the terms and conditions mentioned in tender notice and also in
agreement if the supplier supply the material according to
agreement than his payment is released and also bank guaranty
otherwise payment or guaranty may be stopped.

STRENGTH
1. Pakistan Steel has unloading and conveyers system at port Qasim is
the 3rd largest in the world. All the imported raw material, viz, iron core
coking coal and manganese is transported to the main plant 3.4
kilometers away through this conveyer’s belt. The conveyer’s belts
have a width of 1200mm and a capacity of transporting 1200 tones raw
material per hour.
2. Pakistan steel has its own thermal power plant in which a by product
coke oven gas is used for generating electricity is the thermal power
plant, each having a capacity of 55 megawatts over and beyond its
own need Pakistan steel supplies electricity to the KESC.
3. Pakistan steel has its own two energy plant for producing gas liquid
oxygen and Nitrogen. Each unit has a daily capacity of 250 tones of
Nitrogen oxygen is sold to outside parties when it becomes surplus to
requirement of Pakistan steel.
4. Pakistan steel has made arrangement for its scientific quality control
test at every stage of production to maintain the high quality of its
products.
5. Pakistan steel has Pakistan ‘s largest mainframe computer to keep the
record of whole type of data and other in formations of Pakistan Steel.
6. Pakistan Steel has education and research facilities for the students.
The institutes of material sciences and research (IMRSR)is preparing
expertise and research engineer equipped with sound knowledge.
7. The institute of environment sciences and research (IERSR) is
responding for under standing of and certification of ISO 14000
environmental management standards and to meet the future
requirement of environment experts. IESSR is the first loading
research institute in the country with back up of well equipped research
laborites and computer centre.
8. Metallurgical training centre (MTC) is designed to impart training in 64
trades to 1600 students/workers annually relating to mechanized
chemical electrical and metallurgical. So for about 10,000 persons
have been provided training and skill development services at MTC.
9. the major strength that Pakistan steel has is its leadership chairman of
Pakistan steel who with his strong and personal commitment has
managed to transform Pakistan steel into a world class company
General Abdul Qayyum khan has dedicated him self to development of
Pakistan steel which has shown remarkable results under their

leadership specially in the field of outstanding sales records significant

profits moulding the environment condition and welfare work.
10. Pakistan steel has received ISO 9001 (quality certificate) ISO 14001
(certification of environmental science management system) and SA
8000 (certification for improvement of working condition of and
organization)
11. Pakistan steel has a industrial water reservoir with a capacity of
110million gallons per day is the largest concrete reservoir in Asia.
12. The planet’s 2 kilometers long fly over which connect the steel mills the
largest when built.
13. Pakistan steel is provided with modern techniques such as dry-
quenching of coke, oxygen enrichment of the plants high top pressure
and high blast temperature in the blast finance.
14. Apart from the various facilities, utilities and services like water system,
steam system gas services , compressed air services, lubricants and
fuel oil services, weigh bridge, roads internal railway system and
training services are also provided to Pakistan steel.
WEAKNESS

1. Under the previous sale policy the Pakistan steel had been a paradise for the
plunders and looters. The steel dealers enjoyed monopoly in lifting the
products at their own terms and condition. Misuse of power of Chairman
regarding quota, and parchi system had given birth to large number of fake,
dishonest and bogus dealers.
2. The major weakness of Pakistan steel is the more administration cost due to
the overstaffing and large number of experience employees. The Russians
who gave the plant had proposed that PS would require 15000 regular
workers during the operational stage. By end 1981 when one coke-oven
battery and blast furnace had barely gone into production, the manpower had
touched the level of 24,000 regular employees. It is surprise to know that in
Pakistan steel the number of officers is more than the number of worker.
3. The demand of Pakistan steels products is ever-increasing but due to its
lower capacity of production which 1.1 million ton per year Pakistan steel is
fail to fulfill the demand for its products the total demand of steels products in
Pakistan is about 4.5 million ton per year and the capacity of Pakistan steel is
only 1.1mtpy.
4. The Non-Development charges of Pakistan steel were touching as high as
Rs. 1.2 billion per year. It will be interesting to not e that such high amount
was spent to produce only 14% of capacity.
5. A large number of vehicles were being misused by unauthorized worker and
officers.
6. The standard of the foods in the canteen of workers is not better that resulted
in de-motivation of Pakistan steel‘s employees. The main reason is that the
contractors of these canteens misuse the subsidies given by top
management.
7. Pakistan steel has no efficient research and development department which
is key to product innovation and process innovation.
8. Due to no repair and maintenance of equipment and machinery for last many
years, there is always danger for the losses of precious lives of employees,
which resulted in dissatisfaction in the labor force even in engineers.
9. Capital repair has not been made from last many years, which affect the
quality of products and speed of production.
10. Due to no proper maintenance and capital repair of plant, the rate of rejection
is increasing.
11. Pakistan steel has highly centralized system of decision making, due to this
delay in work does occur. Lengthy procedure and too much documents
resulted in delays of many urgent in many urgent policies to implement.
12. PAKISTAN STEEL has stopped the recruitment process for last many years
that resulted in no availability of fresh blood. Most of the employees are on
the age of retirement and having qualification of graduation level.
13. The focus of Pakistan steel is on cost accounting rather than cost control.
14. Too many departments of Pakistan steel contributing very less profit to
Pakistan Steel, as compare to the cost.

Conclusion
During the course of my internship, I found that Pakistan steel was
set up with on objective to achieve a self reliant and vibrant economy. Up to
some extent it has been successfully in achieving this goal. It has highly
beneficial impact on Pakistan’s economy. It has been instrumental in creating
new hob opportunities, promoting advancement its technological know, how
enlargement of wide range and variety of production, opening of new vistas of
technical and economical and economic cooperation internationally and giving
the start of the research and development activities in the field of metallurgy
specifically and in other technological fields.
Pakistan steel has a potential to provide a sound base for
industrialization and can provide stimuli for setting up of down stream industries.
It can also play a significant role in up gradation of technology and acquisition of
new technologies. It is also contributing billions of rupees to govt. of Pakistan by
way duties and taxes, but unfortunately this biggest industrial unit is suffering
from various problems like lake of strategic direction, weak financial position, and
govt. positive attitude towards imports, due capital repair, lake of cost control,
corruption and inefficient use of resources. After overcoming of these problems, it
can make its operations more efficient and take the advantage of expansion
opportunity in order to exploit the future market for iron and steel.

Suggestions
1. Management must be pay attention to the capital repair of plant which
otherwise will prove costly for organization.
2. Old conservative and costly employees should be replaced with young
intelligent, qualified and cheap generation.
3. The persons who are trained from abroad should not to allow taking
VRF at any time.
4. Pakistan steel should free from any political pressure.
5. Proper orientation should be given to the market and sales promotion
activities.
6. There are always need to improve working condition and safety
measures in the production unit.
7. Pakistan steel can increase its profitability and efficiency by promoting
its down stream industries.

Pakistan Steel

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AN INTERNSHIP ON PAKISTAN STEEL

THE ISLAMIA UNIVERSITY BAHAWALPUR 1

THE ISLAMIA UNIVERSITY BAHAWALPUR 2

I am very thankful from the core of my heart to honorable

THE ISLAMIA UNIVERSITY BAHAWALPUR 3

Serial # Description Page #

04 Vision and mission 09

08 Administration and Personnel 13

09 Industrial Relations Department 16

THE ISLAMIA UNIVERSITY BAHAWALPUR 4

THE ISLAMIA UNIVERSITY BAHAWALPUR 5

The report in hand consists of my six weeks experience

As we all are aware that development and growth of any

The engineering goods industry is recognized world over as most critical

THE ISLAMIA UNIVERSITY BAHAWALPUR 6

In January 1971 the government of Pakistan and USSR signed an

Designed to yield an annual production capacity of 1.1 million tones of

THE ISLAMIA UNIVERSITY BAHAWALPUR 7

For a person of modest qualification in earth science, computer,

Since Pakistan steel is based on imported raw materials, a special jetty

The multi-billion rupee Pakistan steel has opened a new vista of

A number of the products of Pakistan Steel have sprung up in its vicinity

Abundant steel, sufficient power and adequate transport are absolute

It took Pakistan steel just a couple of year to overcome the teething

THE ISLAMIA UNIVERSITY BAHAWALPUR 8

In 1968 besides other factors, it was considered by the Government of

In January, 1969, Pakistan Steel concluded an agreement with V/O

THE ISLAMIA UNIVERSITY BAHAWALPUR 9

Today Pakistan Steel is the country's largest industrial undertaking having

THE ISLAMIA UNIVERSITY BAHAWALPUR 10

THE ISLAMIA UNIVERSITY BAHAWALPUR 11

1 Greater response to customer's present & future needs.

10 Improving Corporate Image.

THE ISLAMIA UNIVERSITY BAHAWALPUR 12

1. Development of corporate culture and good governance characterized by

THE ISLAMIA UNIVERSITY BAHAWALPUR 13

LOCATION AND SITE

THE ISLAMIA UNIVERSITY BAHAWALPUR 14

We at Pak Steel, strictly adhere to the ASTM and BSI international

THE ISLAMIA UNIVERSITY BAHAWALPUR 15

billets manufactured by Pakistan Steel Mills Corporation, Karachi and Heavy

THE ISLAMIA UNIVERSITY BAHAWALPUR 16

Industrial Relations Department

Administration and personnel

Numbers of Main Products List of By Products

1. Pig Iron. 1. Oxygen

2. Billets products. 2. Tar Cool

3. Galvanized products. 3. Granulated Slag

THE ISLAMIA UNIVERSITY BAHAWALPUR 17

4. Hot rolled products. 4. Boulder Slag

5. Cold rolled products 5. Refractory Bricks

7. Formed Section 7. Nitrogen

Administration and personnel department is responsible for overall

THE ISLAMIA UNIVERSITY BAHAWALPUR 18

This section deals with maintenance of leave records of all the

THE ISLAMIA UNIVERSITY BAHAWALPUR 19

investigation and examination of enquiry reports of the completion of

Quality Policy of Administration &

Administration and Personnel department commits to:

THE ISLAMIA UNIVERSITY BAHAWALPUR 20

The general function of industrial relations department is to create

THE ISLAMIA UNIVERSITY BAHAWALPUR 21

This section deals with group insurance, workers compensation