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Pakistan Steel Mills to step up production in 2015 with government backing

Pakistan Steel Mills to step up production in 2015 with government backing

   

Pakistan's steel giant and only integrated plant Pakistan Steel Mills will increase capacity utilization this year thanks to financial support from the government.

In early March, Pakistan's Economic Coordination Committee decided to allocate PKR 960 million ($9.4 million) to settle the two-month wage debt. However, Pakistan Steel Mills needs more funds to reach maximum production capacity. Additional funding will be brought up next week during the next session of ECC. “We need PKR 8 billion more [about $79 million] to carry out overhaul of the equipment and expect the ECC's next session will bring positive outcome,” the company's representative told Metal Expert. “Without government's support we will not be able to overcome this year's target of 70% [capacity utilization] that we plan to reach by end-March,” he added.

The government's measures aimed at stabilizing the country's power sector play into the producer's hands as well. Also, ЕCC approved issuance of PKR 40 billion ($394 million) sovereign guarantee to the Ministry of Water and Power to develop power network, local The Nation reports. “We hope that the number of forced downtimes over power supply failure will decrease in 2015. Increased financing of projects for upgrading national power lines will help with failures during peak periods, but it is too early to draw conclusions,” a representative of Pakistan Steel Mills says. Capacity utilization of local steel plants fell on average by 30% due to irregular power supply in summer 2014, Metal Expert reported earlier.

Pakistan Steel Mills presently runs its facilities at 58%.