Import tariff cut of long steel to trigger steel mill shutdown

Asian Metal: Hi Mr. Ansar Hussain Rizvi. Thanks for taking part in our interview. Please provide an introduction of your company.

Ansar: Amreli Steels is the first steel manufacturing company in Pakistan to set-up a state-of-art integrated steel plant. Since its inception, Amreli Steels has been growing continuously. From a small steel nails manufacturing company to a fully integrated steel plant, it has come a long way.

Asian Metal: What improvement did your company make in recent two years?

Ansar: A brand new mill was set up with a capacity of 450,000 of tons of finished products per annum. The mill has been commissioned and is fully operational. The current production capacity for rebar is 600,000tpy, up from 240,000tpy in 2018.

Asian Metal: What is your company's superiority over other producers in Pakistan?

Ansar: Amreli Steels is a brand that has been recognized for its superior quality and respected for its long standing history and recommended by prominent influencers in the industry. We are No.1 endorsed brand by engineers and architects, we are the largest selling brand of steel bars in Pakistan, and most iconic landmarks of Pakistan including airports, hospitals, office buildings and various industrial structures stand tall are built by rebar from Amreli Steels.

Asian Metal: Did your company suspend production after COVID-19 outbreak? Can you introduce some details for the situation at that time? How did you company reduce the negative impact brought by the COVID-19?

Ansar: Yes, we were forced to close down our production facilities for 45 days.

First of all, the plants were shut down completely. Only a few of the essential staff were allowed to come to the factory. Strict SOPs were implanted, like wearing face masks, maintaining social distance at all places including the dining area. Employees were only allowed to enter after their body temperature was checked and disinfectant was sprayed on them. Hand sanitizer dispensers were installed at various locations. All offices were disinfected regularly.

During those difficult times, when multi-national companies were laying of entire production shifts, Amreli Steels did not fire a single employee, neither permanent nor daily wages workers. The management of Amreli Steels went an extra mile by forming a fund for helping our workers. The CEO contributed his one-month salary for that fund and the rest of the management staff also donated for this noble cause.

Asian Metal: How did the rebar market price perform in Pakistan during Aug-Sep?

Ansar: Prices were quite consistent and there were not any significant fluctuation in August and September. Premium or first tier producers sold materials at PKR112,000-117,000/t (USD673-703/t) during this time.

Asian Metal: How do you think rebar prices would perform in Q4 of this year?

Ansar: I don't think that there would be much change for rebar prices in the next few months to follow. Even though steel scrap prices trended to move up in the most recent one month, the demand from downstream industries remained weak and recovers very slowly after the COVID-19.

Asian Metal: It is reported that many steel producers in Pakistan expanded production capacity in past two years and now the supply exceeded demand. However, it seems the government wanted to lower import tax for long steel products. What are your opinions on this?

Ansar: Rationalization of tariff is under consideration by the Government of Pakistan. Steel industry fears huge losses and even its closure in case the proposed tariffs are implemented. According to Pakistan Association of Large Scale Steel Producers (PALSP), which represents over 60 per cent of the primary steel output of Pakistan, the proposed changes in tariff lines related to steel products would ultimately lead to the closure of steel factories in the country.

Asian Metal: Whether your company has some plans to expand business in the coming year?

Ansar: Amreli Steels is a progressive company, and as I mentioned earlier from a small hardware company to a fully integrated steel plant it has come a long way. Amreli Steels definitely has plans for further expansions but it all depends upon the country's economic situation. Pakistan is recovering from the COVID pandemic. Construction industry has already resumed their activities. As soon as the conditions are suitable, Amreli Steels will go for further expansion.

Asian Metal: Thanks for sharing with us your opinions and wish your company a brighter future!

Ansar: Thanks and wish Asian Metal a better future!