Capacity expansion plan at Pakistan Steel Mills

Capacity expansion plan at Pakistan Steel Mills

According to Indian and Pakistani industry reports, Pakistan Steel Mills (PSM) which is the country's biggest steel facility, is aiming to expand its capacity in the next couple of years by the help of Russia and China. Furthermore, the Pakistani government has approved the PSM's expansion plans in January. Through this expansion plan, the company aims to increase its annual capacity from 1.1 million tons to 3 million tons. Pakistan and China signed a memorandum of understanding (MoU) to extend a credit line of $700 million for the expansion of PSM. In addition, PSM and Russia have concluded an agreement for technical and financial cooperation in order to improve its capacity. For the first stage of the expansion plan, PSM will raise its annual capacity to 1.5 million tons in June 2005 with help of Russia and then Chinese will assist the company to increase capacity 3 million tons by 2007. Despite PKR 10.41 billion (approx. $178 million) liabilities to a consortium of five banks, PSM expected to record sales of PKR 22.8 billion and a net profit of over PKR 1 billion for the fiscal year 2002-03. PSM established in the mid-1970s with Soviet assistance and produces hot rolled, cold rolled and galvanized sheets and coils.