Steel Industry of Pakistan

Introduction
• Use in roofs of our houses, dams, roads or bridges.
• Major products are mainly divided into following segments:
Flat products
Long products
Tubes and pipes
Raw product & Semi-finished products
• Contributes 3.3% to GDP
• Provide employment to about 1 million people
Flat Products Tubes and Pipes

Long Products
Background And Current Scenario
• On 30th Dec, 1973, Zulfiqar Ali Bhutto laid the foundation of first steel
industry known as “Pakistan Steel”, in Karachi.
• Current production is six million metric tons.
• Around 600 small and big players, which makes this industry very
fragmented.
• The production of Pakistan Steel Industry is at 1.1 million tons
capacity while it has capacity of 3 million tons.
• However this industry has witnessed 35% growth but the
consumption is very low.
Figure a: Domestic steel production and imports Figure b: Consumption pattern of Steel
• China and Ukraine are giving very tough time to local steel market of
Pakistan due to cheap import of steel.
• The government has taken strong measurements against import of
steel through anti -dumping duty on imports in the range of 13.17%-
19.04%.
Decade Analysis
1947-60:

• No steel industry after independence.

• Heavy reliance on imports of steel.
• Imports of steel hampering economy.
• Studies to set up steel industry by Pakistan Council of Scientific and
Industrial Research (PCSIR)
• Krupp industries of West Germany offered to set up steel industry.
1960-1970

• In 1967,another German company, Salzgitter AG, offered to set up

steel industry in the area of Kalabagh.
• Then in 1968, Russian government made an offer to establish
Kalabagh Steel Mill, which was accepted by President Ayub Khan, but
later on it was found out that Russia had no such technology to build
this mill.
• On 2nd July 1968 formed, Pakistan Steel Mill Corporation (PMSC)
1970-1980

• Finally in 1971, an agreement between USSR and Pakistan was signed,

which stated that USSR would provide technical and financial
assistance to Pakistan in construction of its first steel industry. Then at
last on 30th Dec, 1973, Zulfiqar Ali Bhutto laid the foundation of first
steel industry known as “Pakistan Steel”, in Karachi.
SWOT ANALYYSIS
Strengths
• Monopoly
• Proximity to the port
• High domestic demand
• Distribution Network
• By-Products
• Availability of Natural Resources
Weaknesses
• Imported Raw Material
• Overstaffing
• Bureaucratic management
• Out dated plants
• Disrupted gas supply and energy crisis
• Poor credit history
• No training and Research plans
• Low per capita consumption
Opportunities
• Significant increase in demand due to CPEC and other development
projects
• Utilization of natural resources available such as coal and Iron Ore
• Investments in training and development
• Explore local demand opportunities through improved marketing and
advertising
• Opportunities to export steel products to attractive markets including
China, Russia and Iran.
Threats
• Free trade Agreement with China for importing steel scraps and raw
materials as well as finished goods
• Increasing international steel prices and depreciating Pakistani
Currency
• Policies of Government
• Energy shortages
• Law and order situation
• Tax System