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Amreli Steels unveils Rs6.5bln investment plan

November 10, 2018 12:00 AM
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KARACHI: Amreli Steels Limited on Friday unveiled Rs6.5 billion of investment plan to bring a significant 80 percent increase in reinforcing bar manufacturing.

The company’s board approved third phase of expansion plan to set up an additional state-of-the-art rolling mill using pioneering technology at Dhabeji to further expand its rebar manufacturing facilities.

“This new investment proposal, subject to the approval of technical feasibility and successful financial close, would raise existing rolling capacity of the company from 605,000 metric tons per annum to 1,105,000 metric tons per annum and is expected to complete in three years’ time from financial close,” the company said in a statement to the Pakistan Stock Exchange. “The estimated cost of the expansion plan is approximately Rs6.5 billion, which will be financed through bank borrowings and internal cash resources.”

Amreli Steels further said globally-reputed consultancy firms have been invited to submit their bids for final selection to begin the technical feasibility of the proposed project. “By installation of this new facility, the company will have the largest capacity in Pakistan for producing high-quality rebars with economies of scale in terms of conversion cost,” it added. In February, the company planned to raise production capacity of the rolling mill at the Sindh Industrial Trade Estate from 180,000 to 275,000 metric tons per annum.

“The company has decided to rescind the revamping plan of the company’s SITE rolling mill due to the above expansion at Dhabeji,” the steelmaker said. “Accordingly, there would be no shutdown for a period of ten months (expected from June 2019 to March 2020) as was earlier intimated.”

Steel makers are expanding their production to meet growing demand from construction and industrial development sectors in view of $60 billion China-Pakistan Economic Corridor projects. Pakistan is largely an iron and steel consumer and it imported $5.4 billion of metal imports, accounting for almost 10 percent of annual import bill, during the last fiscal year of 2017/18. Of metal group, iron, steel and scrap consumed four billion dollars of foreign reserves.

The country is, however, seeing a double-digit growth in steel production. The country’s crude steel output climbed nearly 40 percent to five million tons in 2017 due to growing demand for infrastructure and residential developments, according to the World Steel Association.

Also read: PTCL, Convo Corporation sign deal

Source: thenews.com.pk

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