The Pakistan Steel Mills is the producer of long rolled steel products in Karachi, Sindh, Pakistan. The Pakistan Steel Mill is the country's largest industrial undertaking having a production capacity of 1.1 million tonnes of steel. The enormous dimensions of the project can be visualised from the construction inputs which involved the use of 1.29 million cubic meters of concrete, 5.70 million cubic meters of earth work (second to Tarbela Dam), 330,000 tonnes of machinery, steel structures and electrical equipment.
Its unloading and conveyor system at Port Qasim is the third largest in the world and its industrial water reservoir with a capacity of 110 million imperial gallons (500,000 m3) per day is the largest in Asia. A 2.5 km-long sea water channel connects the sea water circulation system to the plant site with a consumption of 216 million imperial gallons (980,000 m3) of sea water per day.
However only 18 percent of this capacity is actually in use and the chairman of the mills has requested Rs12 billion to prevent closure of the mills.
History of Pakistan Steel Mills
After independence in 1947, it did not take long for Pakistan to come to the realisation that progressive industrial and economical development would be impossible without the possession of a self reliant iron and steel making plant. The dependence on imports would cause serious setbacks to the country along with an extortionately high import bill which would be impossible to support.
In 1968, the Government of Pakistan decided that the Karachi Steel Project should be sponsored in the public sector, for which a separate Corporation, under the Companies Act, be formed. In pursuance of this decision, Pakistan Steel Mills Corporation Limited was incorporated as a private limited company to establish and run steel mills at Karachi. Pakistan Steel Mills Corporation concluded an agreement with V/o Tyaz Promexport of the USSR in January, 1969 for the preparation of a feasibility report for the establishment of a coastal-based integrated steel mill at Karachi.
Background: In 1956, M/S Krupp of Germany offered to set up a steel mill based on Kalabagh iron ore, coal and most other minerals available within about 11 miles (18 km). The project was shelved, the Chairman of PIDC, Mr. Ghulam Farooq, resigned. In June 1966, another German company M/S Salzgitter produced in Germany 5,000 tonnes of quality steel from 15,000 tonnes of Kalabagh iron ore in the presence of some international experts, and sold it to Volkswagen. The company offered in August 1967 to set up Kalabagh Steel Mill of over 0.8 million tonnes per year (mtpy) capacity based on Kalabagh iron ore and imported coal at an estimated cost of Rs. 1.542 billion (including foreign exchange cost of Rs. 878 million). Some European banks offered loans for this project, which confirms technical and financial viability of the project. PIDC selected a site with about 80% raw materials available within 11 miles (18 km). This offer was also shelved.In 1972, Chinese experts found a substantial quantity of iron ore in Nokkundi area of Balochistan. Steel experts from America and Japan confirmed its suitability for steel production and recommended to set up a mini-steel mill in Balochistan. Later on, this ore was found suitable for Pak Steel Mill after upgradation. “The News” of January 31, 1999 confirmed that offers from China and Iran for a mini-steel mill in Balochistan were under consideration of the government.In April 1968,President General M. Ayub Khan accepted the Russian offer for Kalabagh Steel Mill project, and the next President General Yahya Khan signed the project agreement with Russia. Subsequently, it transpired that Russia did not have the technology to produce steel from the Kalabagh iron ore. Instead of reviving the German offers based on local raw materials, site of the steel mill project was shifted to Karachi and Pak Steel Mill was established with a comparatively inferior machinery, based on 'imported' iron ore and coal.Construction of Pak Steel Mill was commenced at an estimated cost of Rs. 14.287 billion and commissioned at a cost of Rs. 24.7 billion in 1985, with an installed production capacity of 1.1 million tonnes per year (mtpy).On the average, about 70% to 80% of installed production capacity of 1.1 mtpy has been utilized during the last 17 years. The installed machinery is generally blamed for this inefficiency. For comparison, a Brazilian Steel Mill set up in 1956 with Japanese machinery and technology was producing 4.3 million tonnes steel annually with 13,000 employees (Newsweek, November 4, 1991), whereas the Pak Steel Mill commissioned in 1985 produced about 0.75 million tonnes steel in 1991 with 28,000 employees including 4,000 temporary.
Soviet Contribution to Steel Mill
In January 1971 Pakistan and the USSR signed an agreement under which the latter agreed to provide techno-financial assistance for the construction of a coastal-based integrated steel mill at Karachi. The foundation stone of this vital and gigantic project was laid on 30 December 1973 by the Prime Minister of Pakistan Zulfikar Ali Bhutto. The mammoth construction and erection work of an integrated steel mill, never experienced before in the country, was carried out by a consortium of Pakistani construction companies under the overall supervision of Soviet experts.
Corporate Business and Net worth
Pakistan Steel not only had to construct the main production units, but also a host of infrastructure facilities involving unprecedented volumes of work and expertise. Component units of the steel mills numbering over twenty, and each a big enough factory in its own right, were commissioned as they were completed between 1981 to 1985, with the Coke Oven and Byproduct Plant coming on stream first and the Galvanizing Unit last. Commissioning of Blast Furnace No.1 on 14 August 1981 marked Pakistan's entry into the elite club of iron and steel producing nations. The project was completed at a capital cost of Rs.24,700 million. The completion of the steel mill was formally launched by the then-President of Pakistan on 15 January 1985. Pakistan Steel today is the country's largest industrial undertaking, having a production capacity of 1.1 million tonnes of steel.
Founders of Pakistan Steel Mills
The real founders of Pakistan Steel Mills are Prof. Dr. Niaz Muhammad, Wahab siddiqui and Russian scientist Mikhail Koltokof. It was the hard work of Niaz Muhammad that thousands of scientists and technical staff got trained by him. His inspirations and innovations got him the highest award from President of Pakistan, and also from Government of USSR. The Government of Pakistan has given him Pride of Performance. He was also nominatd for Nobel prize.
Location and site
Pakistan Steel is located at a distance of 40 km Southeast of Karachi at Bin Qasim near Port Muhammad Bin Qasim. It was found to be an ecologically preferable location, alongside a tidal creek and having a wind direction away from the city of Karachi. Pakistan Steel is spread out over an area of 18,660 acres (75.5 km2) (about 29 square miles (75 km2)) including 10,390 acres (42 km2) for the main plant, 8,070 acres (33 km2) for the township and 200 acres (0.8 km2) for the 110 MG water reservoir. In addition it has leasehold rights over an area of {convert7520acrekm20} for the quarries of limestone and dolomite in the Makli and Jhimpir areas of Thatta district.
Social obligations
Pakistan Steel Mills, besides its core activities, has done a lot in making the environment in and around Pakistan Steel green and beautiful through the addition of three unique projects: the Quaid-I-Azam Park, The Quaid-I-Azam Cricket Park and the Quaid-I-Azam Beach. The Quaid-I-Azam Park, which spreads out over an area of 45 acres (0.18 km2), consists of a series of six interconnected lakes, lush green lawns and grassy terraces, colourful flower beds, fountains, life- size steel-made models of wild and marine animals, a jogging track, a bird sanctuary and mini-zoo, as well as a children's play and recreational ground and boating facilities.
The other unique project, known as the Quaid-I-Azam Cricket Park, has been established amidst the picturesque surroundings of Steel Town, featuring sloping grassy terraces all around for spectators and four diagonally-located hillocks with seating arrangements to provide a panoramic view of the game.
This is spread over an area of 32000 sq. meters and is equipped with all the necessary facilities, conforming to international standards. The third project, Quaid-I-Azam Beach, is being developed with the aim to provide a seaside recreational spot to the employees of Pakistan Steel, especially those residing at Steel Town and Gulshan-e-Hadeed. Mohammad Mushaffay Ahmed is majority times elected president of Pakistan steel mills union.
Pakistan Steel is also on its way to establish Quaid-I-Azam National Park over a vast area of 400 acres (1.6 km2) adjacent to Steel Town which shall be a tremendous contribution in the development of the environment.
Privatisation of Steel Mills
In May 2006, the government of General Musharraf privatised Pakistan Steel Mills. The consortium involving Saudi Arabia-based Al Tuwairqi Group of Companies submitted a winning bid of $362 million for a 75 per cent stake in Pakistan Steel Mills Corporation (PSMC) at an open auction held in Islamabad. the consortium of Saudi Arabia-based Al Tuwairqi Group of Companies, Russia's Magnitogorsk Iron & Steel Works and local firm Arif Habib Securities paid a total Rs21.6 billion ($362 million), or Rs16.8 per share, to take control of Pakistan's largest steel manufacturing plant.
Tuwairqi Group of Companies, one of the Ieading business concerns in Saudi Arabia, also launched a $300 million steel mills project at Bin Qasim. The group will set up Tuwairqi Steel Mills (TSM), a state-of-the-art steel-making plant in the southern port city of Gawadar, Pakistan.
