Karachi: Amreli Steels Limited, Pakistan’s leading steel bar manufacturer has signed a contract with Primetals Technologies, world leader in metallurgical plant solutions, on July 27, 2015, here in an exclusively ceremony held at a local hotel. The objective was to build the Pakistan’s largest steel bar manufacturing facility with a capacity of 300,000 tons per year. After the expansion, Amreli’s total steel bar capacity will be at half a million tons per year.
Primetals Technologies is a joint venture of Siemens, VAI and Mitsubishi –a giant international conglomerate that provides steel manufacturing solutions across the value chain; right from the raw materials to the finished products. With manufacturing facilities in USA, Italy and China, Primetals is the largest equipment supplier to the most prestigious steel manufacturers in the world. Amreli Steels expansion is being engineered and executed by the Primetals Technologies Long Products division in Milan, Italy that has a record number of 500 installed plants worldwide.
“We selected Primetals because they are able to provide the kind of cutting edge technology to obtain unparalleled cost and quality benchmarks that will translate into a better bottom line. This investment is in line with our mission of providing the best quality steel products while maintaining cost leadership in the industry.” mentioned Shayan Akberali, Managing Director at Amreli Steels Limited. Amreli hopes to drastically reduce energy consumption and wastage in manufacturing steel bars by adopting this pioneering new technology in Pakistan.
“Primetals is very excited about partnering with Amreli Steels Limited for our first project in Pakistan. We are providing a state of the art plant that is comparable in standards to any steel bar facility in the world and we believe Amreli’s management has the capability and experience to run this plant very efficiently” remarked Mr. Sergio Galimberti, Senior Sales Manager at Primetals Technologies.
Abbas Akberali, CEO Amreli Steels, while informing the potential of steel growth in country said that Pakistan is 6th largest population in the world with 50% people are under 25 years. There is huge growth in urbanization, and once you come in urbanization center everybody want to become nuclear family. World Bank estimates Pakistanis are short of 800 million housing units. The situation translate to 500 million tons of steel bars requirement if we assume 1000 square feet small house or flat. Per capita consumption of steel bars in Pakistan is approximately 19-20, average developing countries is more than 45 while in India it is somewhere around 70. These facts shows that there is huge potential in observing capacity of the economy to use steel bars and other steel items.
The expansion comes at a time when the industry outlook is very robust and steel demand for construction is at record levels as demonstrated by the 36% growth in the iron and steel sector in “Many large infrastructure, housing and commercial projects have been announced and some have already started construction. These projects are going to be constructed over the next 5-10 years and we want to ensure Amreli captures the maximum share of the growing demand by investing in capacity expansion,” mentioned Mr. Shayan.
Amreli Steels is financing the project through an Initial Public Offering that is scheduled sometime in August. “Amreli is looking to implement the new plant at a discounted project cost of only PKR 3 billion because the company has already invested in creating the plant’s infrastructure over the past few years” stated Mr. Akberali. According to Amreli’s representatives, preliminary civil works have already started on site and engineering works have also kick started. The company hopes to start commissioning the plant in December 2016.