Saturday, March 3, 2018

Pakistan is the World's Fastest Growing Steel Producer

Steel production in Pakistan jumped 39.3% to 5 million tons last year, according to World Steel Association. Earlier, Pakistan steel industry ramped up its output from 2.9 million tons in 2015 to 3.6 million tons in 2016.

While Pakistan's steel production growth is the world's fastest,  its relatively small steel production volume of 5 million tons ranks it 28th in the world. Other nations seeing strong growth in steel production are Iran (up 21.4%), Vietnam ( 31.9%) and Egypt (35%).   Iran ranks 13th with 21.7 million tons; Vietnam ranks 19th with 10.3 million tons; Egypt ranks 23rd with 6.8 million tons produced in 2017.

Some of the key names ramping up production capacity in Pakistan are Aisha Steel Mill (ASM),  Amreli Steels and Agha Steel Industries.

ASM, an Arif Habib Group company, is planning to expand capacity to a total of 700,000 tons a year from its current capacity of 220,000 tons.

Amreli Steels Limited, country’s leading steelmaker has announced plans to increase its annual production capacity of reinforcement bars to 750,000 tons a year within the next two years.

World's Largest Steel Producers. Source: Worldsteel.org 

The biggest drivers of soaring steel demand in Pakistan are rapidly growing large scale manufacturing and construction sectors.

Car sales shot up  23% while motorcycle sales soared by 20% in January 2018, according to industry data.

The cement sales, a good proxy for construction sector, rose 14.3% in the first 7 months of fiscal 2017-18.

Pakistan is the third fastest growing economy among the top 25 economies in terms of purchasing power parity.  Pakistan's economic growth is continuing to accelerate amid rising rising investments led by China-Pakistan Economic Corridor related infrastructure and energy related projects.  The IMF sees Pakistan economy growing at 5.6% while the World Bank forecasts it to grow by 5.5% in current fiscal year 2017-18 ending in June 2018, a full percentage point faster than the 4.5% average GDP growth for Emerging and Developing Economies (EMDEs) that include Argentina, Brazil, China, India, Nigeria and Russia among others. However, Pakistan economic growth continues to lag growth forecast for regional economies of India and Bangladesh. The report also calls attention to the expanding current account gap as a matter of concern that must be taken seriously by the government to avoid yet another return to the International Monetary Fund (IMF).

Related Links:

Haq's Musings

CPEC is Transforming Least Developed Parts of Pakistan

Per Capita Income in "Failed State" of  Pakistan Rose 22% in 5 Years

Credit Suisse Wealth Report 2017

Pakistan Translates GDP Growth to Citizens' Well-being

Rising Motorcycle Sales in Pakistan

Depth of Deprivation in India

Chicken vs Daal in Pakistan

China Pakistan Economic Corridor

24 comments:

Z Basha Jr said...

we must learn from our friend china in this regard..On the top-10 list their output is bigger than the cumulative of next 7-8 steel producing countries on the list...Among net importers we have many brotherly countries we can sell to.. The chinese can be asked for transfer of technology..

Riaz Haq said...

Last year (2016), Iran’s steel sector was the sixth fastest growing in the world after Serbia with 22.7%, Pakistan 22.8, Greece 31.8%, Libya 39.8% and Macedonia 62.2%.


https://financialtribune.com/articles/economy-business-and-markets/62866/iran-steel-output-up

Iranian steel mills produced 4.57 million tons of crude steel during the first three months of 2017, registering a 4.6% growth year-on-year, according to the latest report released by World Steel Association.

The report shows Iran’s crude steel output in March stood at 1.58 million tons, indicating an 18.3% rise compared with last year’s similar month. The February output stood at 1.37 million tons, indicating a 1.1% growth compared with February 2016. January output was at 1.52 million tons, up 11.3% compared with the corresponding month in 2016.

The world’s 67 steelmaking countries speeded up their production growth. Global crude steel output stood at 410.548 million tons for the three-month period, indicating a 5.7% increase year-on-year.

China was the top steel producer with 201.09 million tons, followed by Japan with 26.22 million tons, India with 25.76 million tons, the United States with 20.4 million tons, Russia with 17.95 million tons, South Korea with 17.25 million tons, Germany with 10.98 million tons, Turkey with 8.78 million tons, Brazil with 8.25 million tons, Italy with 6.12 million tons, Ukraine with 6.1 million tons and Taiwan with 5.51 million tons.

Iran was the world’s 14th largest steelmaker, as it was placed between Mexico (13th) with a 5.176 million ton output and France (15tH) with 3.9 million tons.

Iran’s crude steel output stood at 17.89 million tons in 2016, according to WSA data, registering a 10.8% growth compared to the year before.

Last year, Iran’s steel sector was the sixth fastest growing in the world after Serbia with 22.7%, Pakistan 22.8, Greece 31.8%, Libya 39.8% and Macedonia 62.2%.

The Iranian Mines and Mining Industries Development and Renovation Organization’s latest report indicates that Iranian steel mills produced 14.46 million tons of steel and steel products in the last Iranian year (ended March 20, 2017), up 4.58% year-on-year.

Mobarakeh Steel Company was the country’s biggest steelmaker during the period with 7.46 million tons.

Iran aims to become the world’s sixth largest steel producer as per the 20-Year Vision Plan (2005-25), which envisions an annual production of 55 million tons of crude steel and 20-25 million tons of exports per year by the deadline.

According to Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, Iranian steel mills have so far materialized 31 million tons of the annual steel manufacture capacity target.

Major Iranian steelmakers exported over 5.38 million tons of crude steel and steel products in the last fiscal year (March 2016-17), registering a 29% growth compared to the year before, data released by Iranian Mines and Mining Industries Development and Renovation Organization showed.

Khouzestan Steel Company had the lion’s share of the exports, as it shipped 767,542 tons of slabs, 718,327 tons of billets and 472,750 tons of blooms overseas.

Anonymous said...

India 25.7!!! India produces 101 million and on its way to become #2 after China.

https://www.worldatlas.com/articles/the-top-10-steel-producing-countries-in-the-world.html

https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/indias-crude-steel-production-rises-6-2-to-101-4-mt-in-2017/articleshow/62693506.cms

Azeem J. said...

And Steel Mill is closed??

Riaz Haq said...

Azeem: "And Steel Mill is closed??"


Pakistan’s private steel mills are growing rapidly. PSM owned by the state is very poorly managed as are other state owned businesses like PIA

http://www.riazhaq.com/2012/02/save-pakistans-education-airline.html

Riaz Haq said...

Anon: "India 25.7!!! India produces 101 million and on its way to become #2 after China."

Read carefully. The 25.7 million tons is for a quarter. Multiple by 4 to get annual figure.

BTW, China produced 800 million tons, 8X more than India. So India will still be a distant second after surpassing Japan.

Anonymous said...

Yes of course I know that India is 1/8 of China. BTW Pak seems to be 1/20th of India.

Riaz Haq said...

Anon: "Yes of course I know that India is 1/8 of China. BTW Pak seems to be 1/20th of India"

Couple of points:


1. India's population is about the same as China's.

2. Pakistan's population is 1/7th of India's and Pak steel production is 1/20th India's. But Pakistan steel production is growing at about 40% a year, about 8 times faster than India's.

http://www.livemint.com/Industry/4JYy6XPWz7aMTJkmQYAc7O/Indias-crude-steel-output-hits-record-100-million-tonnes-in.html

Riaz Haq said...

THE EXPRESS TRIBUNE > PAKISTAN
Larger bench formed to revisit decision on privatisation of Pakistan Steel Mills

https://tribune.com.pk/story/1650114/1-larger-bench-formed-revisit-decision-privitisation-pakistan-steel-mills/

Chief Justice of Pakistan (CJP) Mian Saqib Nisar has formed a nine-member larger bench to take up the matter related to the Supreme Court’s judgment that halted the privatisation of Pakistan Steel Mills in 2006.

The bench, to be headed by the chief justice himself, will take up the matter on March 6.

However, it is not yet clear whether the larger bench will revisit the judgment or not.

Other members of the bench are Justice Asif Saeed Khosa, Justice Ejaz Afzal Khan, Justice Dost Muhammad Khan, Justice Umar Ata Bandial, Justice Maqbool Baqar, Justice Faisal Arab, Justice Ijazul Ahsan and Justice Sajjad Ali Shah.

Last month, while hearing a case, the chief justice had asked senior lawyer Khalid Anwar about his opinion regarding the Supreme Court’s 2006 judgment that halted the privatisation of the PSM. The counsel had replied that it was a ‘bad’ verdict.

On behalf of one respondent, the counsel had filed a fairly comprehensive review petition but it was dismissed in his absence as he was on general adjournment.

Upon this, the chief justice asked the Registrar Office to place the file of the case before him.

The larger bench will take up plea for the restoration of review petition.

A section of lawyers believes that the judgment on the PSM should be revisited. The country is currently losing billions of rupees due to the Supreme Court’s 2006 ruling.

Last month, Prime Minister Shahid Khaqan Abbasi gave a formal go-ahead for the privatisation of two major yet loss-making entities — Pakistan International Airlines and the Pakistan Steel Mills — apparently on the pretext of ‘restructuring’.

He granted the related approval while presiding over a meeting of the Cabinet Committee on Privatisation (CCoP) at the Prime Minister’s Office.

Faisal said...

Capacities anticipated
International Steel
International Industries
Mughal Steel
ITTEFAQ Steel
Aisha Steel
Dost Steel among listed

Amreli showing delay

Mo said...

According to the World Steel Association (WSA), steel use in 2015 was 7.1 million tonnes in Pakistan, translating to per capita use of 37.5kg. Going forward, Pakistan’s steel requirement is expected to swell over 12m tonnes taking the country’s per capita requirement to 62kg by 2019.
Analyst Adnan Sami Sheikh at Topline Securities affirms that the demand for steel has been fuelled by a wave of capital expenditure aimed at capturing the swelling demand of quality steel products that will come about as a result of infrastructure projects such as power plants, dams, airports and road networks along with public and private housing schemes.

The specific steel produced to meet those demands is produced by Amreli Steel Limited (ASTL), Mughal Steel Limited (MUGHAL) and soon to be commenced by Dost Steels Limited (DSL).

Manufacturing growth led by investments in the auto and appliance sector is expected to spike demand for flat steel rolled by International Steels Limited (ISL) and Aisha Steel Limited (ASL).

And finally, the rehabilitation and expansion cycle in oil, gas and other industries, along with planned pipelines projects, would require huge quantities of steel pipes welded by Crescent Steel and Allied Products (CSAP), International Industries Limited (INIL) and Huffaz Seamless Pipes (HSPI).

According to analyst Waqar Uddin Salim at Summit Capital, Aisha Steel Mill Limited (ASL) is enhancing its plant by increasing Cold Rolled Coil (CRC) capacity to 450,000MT per annum from 220,000MT per annum.

The company is also introducing a new Galvanised product line (GI) with a capacity of 250,000MT per annum. “CRC demand in the local market is expected to remain buoyant due to a surge in automobile and home appliances demand attributable to a boost in economic activity”, he says.

Margins are important for steel companies. International steel prices have considerably retreated from March this year.

A June 15 report by Alfalah Securities observed that scrap currently trades at $250 per tonne, from $281 per tonne in March; HRC at $396 per tonne to $474 per tonne; Cold Rolled Coils (CRC) at $462 per tonne from $591 per tonne and Hot dipped galvanised coil (HDGC) at $548 per tonne to $640 per tonne.

As a result primary margins for CRC-HRC currently hover around $66 per tonne and HDGC-HRC margins are around $152 per tonne. Scrap prices in contrast have been comparatively stable and averaged at $242 per tonne.

It is noted that CRC-HRC and HDGC-HRC spreads are relevant for ASL and ISL whereas scrap prices are more pertinent to ASTL and Mughal.

Besides the escalating demand for steel in the local market, steel companies are banking on positive regulatory changes such as an increase in regulatory duty and imposition of anti-dumping duty.

The National Tariff Commission (NTC) has imposed anti-dumping duty in the range of 8-19pc on import of CRC, and 6-40pc on import of HDGC, to counter steel being dumped from China.

Topline Securities recalled that on January 19, the NTC imposed definitive anti-dumping duty in the range of 13.17pc-19.04pc on imports of Cold Rolled Coils/ Sheets importable from China and Ukraine for a period of five years.

https://www.dawn.com/news/1342913

nayyer ali said...

Wouldnt get too excited about percent increase when dealing with such a small base. Pakistan's domestic steel industry is tiny compared other countries at similar level of development. PSM is a moribund disaster and Supreme Court is guilty of a political verdict when it quashed the privatisation of the firm in 2006. The government has had to make up major losses on its books every year since. Pakistan should be producing 15-20 million tons of steel.

Ali H. said...

Steel imports into Pakistan in 2017 surge by 20%

https://steelguru.com/steel/steel-imports-into-pakistan-in-2017-surge-by-20/501078

According to the data released by Pakistan Bureau of Statistics, finished steel imports into Pakistan have increased by 19.5% in 2017 YoY. The total quantity imported in 2017 was 3.984 million tonnes as compared to 3.334 million tonnes in 2016.
In the absence of Pakistan Steel Mills, private sector has invested heavily in steel imports to cater to the local demand. The surge in investment is also due to the government support in terms of protective policies, ie antidumping and regulatory duties on finished steel products as well government motive to save valuable foreign exchange. In flat steel production, International Steels Limited is expanding their production to 1 million tonnes , while another manufacturer, Aisha Steels, is already commissioning 250,000 tonnes capacity galvanized line. Similarly many major long steel manufacturers are expanding to meet the rising domestic steel demand. As Pakistan Steel Mills is inactive, there is no hot rolled coil manufacturer which is the main raw material for two major domestic flat steel producers as well as for pipe manufacturers. Other products like wire rod and stainless steel is also not produced by domestic mills, thus finished steel imports are likely to grow this year too.

According to the data released by Pakistan Bureau of Statistics, steel scrap imports into Pakistan increased by 24.3% in 2017 YoY. The total quantity imported in 2017 was 4.858 million tonnes as compared to 3.908 million tonnes in 2016.

The increase in demand for scrap is due to the rising consumption and higher duties imposed on billet as well as finished steel imports.

Riaz Haq said...

NA: "Pakistan should be producing 15-20 million tons of steel."

Investors and businesses do not care for nationalism and bragging rights.

They look at cold, hard numbers.

Steel demand in Pakistan is currently about 10 million tons a year and growing at 25-30% a year.

Half of it was met by local production while the rest was imported in 2017.

Pakistani production is growing at 40%, faster than 25-30% growth in demand.

And the current capacity expansion plans of Pakistan's local industry are geared to grow fast enough to do import substitution, not exports.

Why not exports? It's because there's a worldwide steel glut right now and prices are plummeting.

China and others are trying to dump their steel in other countries and triggering anti-dumping duties.

There's no appetite for investing in new steel capacity for exports in a tough international environment.

Riaz Haq said...

Racy Steel Growth in Pakistan, Scrap Imports Seen Up – Mughal Steel


http://events.steelmintgroup.com/racy-steel-growth-pakistan-scrap-imports-seen-mughal-steel/

Mr Khurram Javaid is chief executive officer and director at Mughal Iron & Steel Industries Ltd, one of Pakistan’s largest steel producers at 1.1 million tonnes (mt) and also one of the largest steel scrap importers.


As the south Asian nation looks at double-digit growth in steel demand owing to infrastructure development, Mughal Steel, a listed company, prepares for its own growth in line with it. One of the key people driving the change is Mr Javaid, who has made substantial contributions to the company’s production and sales and is looking to usher in new technology into the business.

Mr Javaid holds an MBA degree from the Coventry University, UK and a BSc degree from the Lahore School of Economics in Pakistan.He has his hands busy at human resources planning, policymaking and training. Following are excerpts from a telephonic interview with Ruchira Singh:

1) What is driving the demand for steel in Pakistan and how much will it grow by this year?

The heightened demand is led by various infrastructure projects coming up particularly coal based power projects and dams. Also, the CPEC (China-Pakistan Economic Corridor) that will be done in the next three years, and the Silk Road (proposed road project between Gwadar in Pakistan to Kashgar in the Chinese region of Xinjiang) will contribute to it.

Demand is expected to grow by 25%-30% year on year. The products in demand are mainly rebars in long rolled segment.Hence, current per capita consumption from 30-32kg against world average about 210kg is expected to reach 40kg in coming year unleashing a growth not experienced in the steel sector of Pakistan.

2) What are the policy changes that are helping demand grow?

Recently an anti-dumping duty of 24.4% on Chinese origin steel billets was imposed, encouraging an enabling environment for CAPEX in Pakistan. Earlier this year similar duties were imposed on Chinese imports of finished steels. All this is encouraging local steel capacities to come up. The government is vigilant on putting tariff as well as non-tariff barriers to help guard against imported materials.Power is also now available 24 hours so steel units are better equipped to step up production. Electricity prices were hiked some years ago and at present there is no issue regarding prices.

3) What are the latest trends amongst consumers?

Other than the growth in infrastructure, in Pakistan, the retail market is opening up. There are 200 million people who breathe, commemorate marriages and grow families, so the market will grow. Just like in India, where there has to be construction of multi-storied buildings to accommodate people, so in Pakistan, buildings have to go multi-storied. Therefore, there is demand and it is for good grades of steel. Our region is prone to seismic activity, so there is an additional pressure to make the steel products very strong as well as elastic; this is fully enforced by government departments to ensure quality compliance.

4) How fast are new capacities being added by the iron and steel industry to process larger imports of scrap? Is there enough funding available for this?

As shared, envisioning market expansion, the government‘s pledge to help faciliate capital investments, regulatory measures to help stabilise local industry, inflow from international market on infrastructual projects, local industry is quite responsive and adaptive to the changes. World’s largest industry players such as „ Primetals“ , NCO, Daneillie, Mitsui etc have already bagged good business recently in long and flat rolled industries, followed only by melting and smelting upstream business. With regards to funding, number of oppurtunities are available now in Pakistan including ECAs (Export Credit Agency), Supplier’s credit, Exim financing along with local muscle from Pakistan banking system, which ineed is quite active as well.

Riaz Haq said...

China’s Billions Cannot Guarantee it a Free Ride in Pakistan
By and
December 6, 2017, 2:00 PM PST
Pakistan placing anti-dumping taxes on imports from ally China
China is funding $55 billion in projects across Pakistan

https://www.bloomberg.com/news/articles/2017-12-06/china-s-billions-cannot-guarantee-it-a-free-ride-in-pakistan

In a dusty factory in northern Karachi, the nation’s oldest tile manufacturer had been struggling to jump on board one of the world’s fastest-growing construction booms.

Fighting to compete with cheap imports from neighboring China, Shabbir Tiles & Ceramics Ltd., a unit of the House of Habib family business operating since 1841, had suffered four years of losses. It’s now on course to post an annual profit next financial year after Pakistan placed an anti-dumping duty on Chinese tiles in October. That follows similar moves from the regulator on steel products.

Pakistan’s National Tariff Commission has been fielding an increased number of anti-dumping complaints, with Chinese companies featuring “fairly significantly,” Chairman Qasim Niaz said in an interview in Islamabad.

Pakistan’s move to place tariffs on imported steel boosted local production by 23 percent to 3.6 million tons last year, the biggest increase among 40 countries, according to World Steel Association data, and local steel firms are expanding.

“China has been dumpers,” said Towfiq Chinoy, an adviser at Karachi-based International Steels Ltd. who believes the anti-dumping tax is “significant” for the local industry. “They have sort of put us in handcuffs for three-to-four years.”


Riaz Haq said...

Egyptian Billionaire Eyes Further #Pakistan #RealEstate Projects - Bloomberg #Islamabad #housing


https://www.bloomberg.com/news/articles/2018-03-06/egyptian-billionaire-eyes-further-pakistan-real-estate-projects

Naquib Sawiris is developing a $2b estate in Islamabad
Pakistan faces a housing shortage as its population expands

Egyptian billionaire Naguib Sawiris’s Ora Developers will next month start building a luxurious $2 billion housing estate on the outskirts of Islamabad and is eyeing further projects as it taps demand from overseas Pakistanis.

The ‘Eighteen Islamabad’ development will feature more than 1,000 homes, a golf course and a mall on 2.25 million square meters of land. It will take six years to complete, said Tarek Hamdy, chief executive officer of the development. Sawiris holds 60 percent in a joint venture with local firms Kohistan Builders and Developers and Saif Group, owned by Pakistan’s prominent Saifullah family.

Pakistan’s real estate sector has seen a boom in recent years as militant violence has receded. Economic growth in the nation of more than 200 million people has risen to around 5 percent as China finances more than $50 billion on infrastructure projects across the country. House prices have more than doubled since 2011, according to property website Zameen.com, and housing projects are mushrooming in cities such as Karachi, Lahore, Islamabad and Peshawar,

“The market isn’t saturated,” Hamdy said in an interview at his office next to Islamabad’s Margalla hills, adding that Sawiris’s firm is eyeing potential other projects that may be announced by the end of this year.

Prices for a three bedroom home on the estate start at 30.5 million rupees ($275,395) and about $400 million will be invested in the development in the first two years, Hamdy said.

‘Highest Quality’
“You can develop a project at very reasonable margins” between 10 to 40 percent, he said. “The highest quality still makes money.”

Sawiris is not new to Pakistan. He previously set up one of Pakistan’s first mobile phone companies, Mobilink, now the nation’s largest cellular firm by subscriber numbers.

Apart from private businessmen such as Malik Riaz Hussain who is building Pakistan’s largest development outside Karachi, the military’s housing business has sped up efforts to grab market share. Hamdy sees overseas Pakistanis particularly in the U.S., U.K. and Middle East as major buyers and is considering launching another housing project by the end of 2018.

A shortage of housing units will boost construction activity in Pakistan as the urban population grows by nearly 30 million by 2027, BMI Research said in a December report. Construction has been one of the largest recipients of foreign direct investment and in the first seven months of this fiscal year $380 million was invested in the sector, according to central bank data.

Riaz Haq said...

House prices in #Pakistan have more than doubled since 2011. Developers flocking to build more #housing. #economy #realestate #CPEC (via @BIAUS)

https://www.businessinsider.com.au/pakistan-house-price-boom-2011-2018-3

Property developers are flocking to Pakistan to take advantage of a housing shortage.
Steady economic growth and a booming population have underpinned a recent surge in house prices.
Pakistan property is booming.

Australia’s residential construction boom may have reached its peak, but it looks as if Pakistan is just getting started on something similar.

As a case in point, a $US2 billion housing construction project gets underway next month on the outskirts of Islamabad, Pakistan’s ninth-largest city.

According to a report by Bloomberg, the project will be run by the development company of Egyptian billionaire Naguib Sawiris, as developers look to cash in on a Pakistani housing boom.

The end-product will see the construction of more than 1,000 new houses, with prices starting at 30.5 million rupees (around $US275,000) for a three-bedroom home.

Pakistan’s economy has been on the rise in recent years, seeing annual GDP growth climb to 5% with a corresponding boom in real estate prices.

The growth trends have been driven by a material reduction in militant violence, and the flow-on effects from $US50 billion worth of Chinese investment in large infrastructure projects.

China has been actively strengthening ties with Pakistan, which it views as a key regional ally for its One Belt, One Road initiative.

Earlier this year, China stepped in to defend Pakistan after the US said it would cut aid to the country. Pakistan also conducts trade deals with China denominated in Chinese yuan.

Bloomberg cited the property website zameen.com, which said house prices in Pakistan have more than doubled since 2011 in the country of 200 million people.

Developers are flocking to the region attracted by the high margins still on offer for major real estate projects, with most developments attracting a return of between 10-40%.

And demand for housing is still strong, with steady stream of new projects in larger cities such as Karachi and Lahore.

The country’s housing shortage is most likely part of a longer-term trend, with Pakistan’s urban population expected to grow by around 30 million people by 2027.

Anonymous said...

Pakistan slaps 24pc anti-dumping duty on Chinese steel

https://nation.com.pk/23-Jun-2017/pakistan-slaps-24pc-anti-dumping-duty-on-chinese-steel

Riaz Haq said...

Pakistan's capacity utilisation stands 91%
07 March 2018

https://www.cemnet.com/News/story/163604/pakistan-s-capacity-utilisation-stands-91-.html

The All Pakistan Cement Manufacturers Association (APCMA) reports that the domestic cement industry's capacity utilisation in the first eight months of this fiscal year (July 2017-Feb 2018) stood at 91 per cent of the total installed capacity of the sector.

In 8MFY17-18 the country's cement industry dispatched 31Mt of cement compared with dispatches of 26.3Mt in the corresponding period of last year, an increase of almost 18 per cent. In February 2018 alone, the total cement dispatches were 3.781Mt.

A spokesman of APCMA said that the cement industry is among the highest contributors to the national exchequer over the last few years. The contribution has increased to PKR117bn (US$1bn) in FY16-17 from PKR39bn in FY12-13. In FY16-17, the impact of duties and taxes was PKR3082/t or PKR154/bag. This incidence of high taxation negatively affects domestic consumption, said APCMA.

Presently, federal excise duty (FED) on cement is PKR1250/t, or PKR62.5/bag. The government should honour its promise and gradually reduce FED to zero to encourage cement off-take as this would support housing and infrastructural development in the country and create more employment, the association argued.

An APCMA spokesman, attributing domestic sector growth to government policies and its thrust on mega infrastructure projects, said that the local production could increase substantially if the smuggling of this commodity from Iranian border is checked.

Moreover, APCMA appealed that the customs duty on import of both clinker and cement should increase to a uniform rate of 35 per cent to support the local cement industry.

"Moreover, import of cement should not be allowed until Pakistan Standards and Quality Control Authority certifies the quality of cement being imported into the country," the association added.

Riaz Haq said...

#Pakistan #automobile sales jump 23% in first 8 months of FY 2017-18 to 170,354 cars.
#manufacturing https://www.dawn.com/news/1394949


Sales of locally assembled cars, light commercial vehicles, vans and jeeps exhibited a 23 per cent year-on-year growth to 170,354 units despite an increase in their prices.

According to figures released by Pakistan Automotive Manufacturers Association (Pama), sales in February stood at 22,654 units, up 15pc as 1Q of calendar year is generally a robust period for auto sales.

The change in import procedure, demand from online ride-hailing services and availability of auto finance at lower rates contributed to strong demand in outgoing month, said Rai Omar Basharat of Topline Securities.

Pak Suzuki Motor Company Ltd (PSMCL) sales rocketed 25pc year-on-year in February as price-conscious models Mehran, up 30pc year-on-year, WagonR 27pc, and Cultus 23pc all showed strong sales growth. The 8MFY18 sales were up 30pc year-on-year to 96,062 units.

Honda’s car sales clocked in at 4,501 units, up 20pc (plus 3pc month-on-month), while 8MFY18 sales grew by 38pc to 33,669 units due to success of recently revamped City and rebound in sales of BRV up 20pc month-on-month.

Toyota lagged behind with a decrease of 8pc/5pc, YoY/MoMm due to capacity constraints, though 8MFY18 units sales were up 2pc YoY.

Tractor sales grew by 14pc in February. Al-Ghazi Tractors outperformed, exhibiting a 40pc growth. During 8MFY18 tractor sales reached 44,627 units, up 40pc.

Total truck sales surged to 5,859 units in July-Feb 2017-18 from 4,677 units in same period last fiscal. Bus sales dropped to 420 units from 765 units.

Two- and three-wheeler sales for Feb 2018 went up by 18pc year-on-year due to rising disposable income of lower middle class, while 8MFY18 sales were up 19pc year-on-year to 1.258 million units.

Riaz Haq said...

#Pakistan #LSM growth speeds up 9.44% in January 2018 to highest in nearly a year. #steel #auto #cement #manufacturing

https://www.thenews.com.pk/print/293334-lsm-growth-speeds-up-9-44pc-in-january-to-highest-in-nearly-a-year

KARACHI: Large scale manufacturing (LSM) sector posted a gigantic 9.44 percent year-on-year growth in January on increasing cement and steel consumption and rising auto sales, official data showed on Friday.

Pakistan Bureau of Statistics (PBS) data showed that large-scale industries grew 13.58 percent in January over December 2017, while LSM growth was recorded at 6.33 percent during the first seven months (July-January) of the current fiscal year of 2017/18. LSM growth stood at 3.45 percent for July-January period of FY2017.

Analysts said the uptrend indicated that actual annual number would surpass the LSM growth target of 6.3 percent set for the current fiscal year.

“Services and agriculture sectors are not showing significant growth and so we can expect that LSM will play a primary role in increasing GDP size,” Ahsan Mehanti, chief executive officer at Arif Habib Commodities said. LSM accounts for 80 percent of manufacturing sector that contributes 13.5 percent share to GDP. Government is eying six percent economic growth for FY2018 as against 5.3 percent in FY2017, which was a decade high.

Mehanti said Chinese-pledged infrastructure developments are leaving positive impact on industrial activities. “So far $15 billion have been invested in CPEC (China-Pakistan Economic Corridor) projects and that investment reflects in rise in cement and steel consumption.”

In July-January, iron and steel production rose around 34 percent, followed by automobiles (21.23 percent) and non-metallic mineral products (12 percent). “The three heads have the highest cumulative growth impact,” Adnan Sheikh, assistant vice president at Pak Kuwait Investment Company said. “Non-metallic mineral production mainly grew on robust cement numbers.”

PBS data showed that cement production soared 23.5 percent year on year in January and 12.3 percent in the July-January period as Cherat Cement and Lucky Cement added their cement production capacities.

Sheikh, however, said LSM growth was hampered by seven percent lower fertiliser production due to plant closures amid high liquefied natural gas price and low urea retail price, along with delay in sugarcane crushing. “This led to nine percent lower sugar production, though it may recover in remaining months.”

PBS said the production in July-January 2017/18 as compared to the corresponding period a year earlier have been significantly increased in food, beverages and tobacco, coke and petroleum products, pharmaceuticals, nonmetallic mineral products, automobiles, iron and steel products, electronics and paper and board while decreased in fertilisers and leather products

All the three data collection authorities registered increase in production during the first seven months of FY2018. Provincial bureau of statistics, counting production of 65 products, recorded 4.84 percent growth in July-January.

Ministry of industries, measuring output trend of 36 items, recorded 6.62 percent increase in production in the July-January period, while Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured 9.45 percent rise in output.

The State Bank of Pakistan said the large-scale manufacturing sector has also been performing well, as it experienced a 10 percent growth during Q1FY2018 – the highest quarterly growth since FY2009.

“The performance was encouraging as, barring fertiliser, all segments contributed positively,” the central bank said in a report. “While cement and steel industries benefitted from the ongoing infrastructure and construction activities, production of white goods was aided by the rising domestic demand.”

Riaz Haq said...

#Mercedes-Benz trucks now to be Made-in-#Pakistan: Daimler AG and NLC sign MoU https://www.financialexpress.com/auto/car-news/mercedes-benz-trucks-now-to-be-made-in-pakistan-daimler-ag-and-nlc-sign-mou/1158008/ … via @FinancialXpress

Pakistan's National Logistics Cell has signed a MoU with Daimler AG to assemble Mercedes-Benz Trucks in the country. With the upcoming China-Pakistan Economic Corridor (CPEC) and a new network that links Pakistan's seaports in Gwadar and Karachi with Northern Pakistan, this new plant will boost Commercial Vehicle sales in Pakistan.

German Automaker, Daimler AG has signed a memorandum of understanding (MoU) with The National Logistics Cell (NLC), Pakistan to set up a manufacturing unit of Mercedes‐Benz trucks in Pakistan. In a statement released by NLC, the company confirms that Daimler AG will locally assemble Mercedes-Benz Trucks in Pakistan and marks a major shift in the logistics and transportation industry’s preference towards European manufacturers.

News report further confirms that Major General Mushtaq Faisal, the director general, and Zia Ahmed, Chief Executive Officer of Pak NLC Motors signed the MoU on behalf of NLC. On behalf of Mercedes-Benz Trucks, Klaus Fischinger, head of the executive committee, and Dr Ralf Forcher, head of sales, were present to sign the MoU.

Major General Faisal further said that this is a historic moment for Pakistan’s commercial vehicle industry. A report on Tribune further quotes him saying “The local assembly of Mercedes‐Benz trucks would prove as a strategic opportunity that would leverage the modernisation of Pakistan’s logistics industry,” said the official. Pakistan government has promised to give more incentives in its Auto Development Policy 2016-21 and these locally-assembled Mercedes-Benz trucks would be sold at competitive prices.

This is also a huge move for Pakistan with the China-Pakistan Economic Corridor (CPEC) coming up, Daimler seems to have invested at the right time to make the most of Pakistan's logistics movement to China.

In an IANS report, Dr Ralf Forcher, head of sales at Mercedes‐Benz Special Trucks was quoted saying "Pakistan’s infrastructure and construction sectors have registered significant growth in recent years, giving a boost to the logistics industry that, in turn, means increased demand for commercial vehicles."

The demand for Commercial vehicles in Pakistan is set to go up with CPEC and a new network that links Pakistan's seaports in Gwadar and Karachi with Northern Pakistan.

Riaz Haq said...

The International Steel Limited (ISL) has commenced production from its new plant, increasing the rolling capacity of the company by 1,000,000 metric tons.

https://www.brecorder.com/2018/06/28/425413/international-steel-starts-new-plant-brings-production-to-1-million-mt/

With the increase in production, after an investment of Rs5.6 billion, ISL has emerged as the largest producer of cold rolled steel products in Pakistan.

“We are pleased to inform that the company’s state of the art rolling mill has commenced production (from) 21 June, 2018. This addition has increased the rolling capacity of the company to 1,000,000 metric tons per annum,” the steel mill said in a statement to Pakistan Stock Exchange (PSX).

“With this expansion, ISL (International Steels) will be the largest producer of flat products in the country resulting in significant reduction in dependence on imported steel products as well as invaluable savings in foreign exchange,” the company added.

The company informed about its expansion plan, back in February 2017, where ISL revealed that it will be adding Cold Rolling Mill, a Pickling line and related facilities, which was arranged through its own finances and long-term bank loans.

The International Steel Limited recorded Rs3.234 billion profit in the nine months ended March 31, as compared to Rs2.016bn profit in the corresponding period last year. The company’s sales jumped 40 per cent to Rs34.817bn during the period from Rs24.781bn in the corresponding period last year.