Brief analysis of Steel Industry of Pakistan , including micro and macro factors and swot analysis

1. Steel Industry

2. Table of Contents
 Introduction
 Classification of steel
 Products of Steel
 Industry structure
 Per capita steel consumption
 Categorization of steel Industry
 Contribution to the economy
 Conclusion
 SWOT Analysis

3. INTRODUCTION
 Steel is a hard, strong grey or bluish-grey
alloy of iron with carbon and usually other
elements, used as a structural and
fabricating material.
 It is the economic backbone of any
country and is the most versatile material
 It is the most recycled material
 we depend on steel in thousands of
ways around the world even beyond our
planet in Space
 From the time you wake and until your
day is down steel is working to make your
life safer, stronger and better
 It supports homes,schools,building,sky-
scrappers,bridges,roads and dams.

4. Raw Materials
 Iron Ore
 Manganese
 Coking Coal/Coke
 Lime Stone

5. Steel Processing
Technique
 Two types of plants are used to convert iron into
steel
1. Electric Arc Furnace (EAF) Method
2. Bio Oxygen Furnaces (BOF) Method
 Production is 34% and 66% respectively

6. Classification of Steel
 The five major classes of Steel are:
1. Carbon Steel
2. Alloy Steel
3. Stainless Steel
4. Tool Steel
5. High Strength Low-Alloy Steel (HSLA)

7. Carbon Steels
 More than 90% of all steels are carbon
steels
 Contain varying amounts of carbon
 Used in machines, auto-mobile bodies
etc

8. Alloy Steel
 Containing certain largest amounts of
Manganese, Silicone and Copper
 More strengthen then carbon steels

9. High-Strength Low-Alloy
Steels
 Have much more strength than Carbon and alloy
steel of same weight
 Buildings are now being constructed with
frameworks of HSLA Steels

10. Stainless Steels
 Contains chromium, nickel, and other alloying
elements
 Used in pipes, chemical plants, trucks, nail cutters
etc

11. Tool Steels
 Contains Tungsten, Molybdenum and other
alloying elements
 They have extra strengths, hardness and
resistance to wear

12. Products of Steel
Direct products By products
• Billets • Oxygen and Nitrogen
• Hot Rolled Products • Refractory Bricks
• Cold Rolled Products • Coal Tar
• Galvanized Products • Granulated Blast Furnace
Slag
• Pig iron • Bolder Slag
• Coke • Ammonium Sulphate
• Chequered Plates and
Formed Sections

13. Steel Industry Structure
 Two Sectors
1. Organized Sector/Public Sector
2. Unorganized Sector/Private Sector

14. Organized Sector
 Major Players
1. Pakistan Steel (PS)
2. Pakistan Steel Mill (PSM)
3. Steel Pipe Mills

15. Unorganized Sector
Particulars Units
Scrap Melters 80
Re-Rolling Mills
1. Punjab
2. Sindh
3. KPK
4. Baluchistan
334
291
37
4
2
Ship Breakers 35
Foundries 450

16. World steel Production
 Produced in more than 50 countries.
 Rapid industrialization created a huge
demand for steel
 Major steel producing countries
1. China 31%
2. Japan 10%
3. USA 8%
4. Russia 6%
5. South Korea 4%

17. Supply of steel over the
World
0
1000
2000
3000
4000
5000
6000
7000
8000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
In 000 Tons
Domestic Production Imports Total Consumption

18. Per capita income in
Pakistan
13.3 14.3
12.4 11.6 12 12.1 12.3
14.4
12
14.2
27
34.7
38.2
0
5
10
15
20
25
30
35
40
45
1994199519961997199819992000200120022003200420052006
Steel Consumption Per Capita (Kg)

19. Steel demand and supply in
Pakistan
 Production range 2 million tons to 3 million
tons in last 9 years
 Demand has increase at rapid rate recently

20. Categorization of steel
Industry
 Ship breaking
 Steel Melters
 Steel Rollers
 Steel Pipe Industry

21. Ship Breaking
 Provides ship plates or re-rolling
industry
 Based in Gadani, Baluchistan
 Annual production ranges between
50,000-100,000 metric tons
 The number of employees working upto
4000

22. Steel melters
 Produce and sell ingots billets
 Produced by melting steel scrap in
electric furnaces
 Currently about 120 Steel furnaces are
operating
 15000 labor force is employed
 Production in 3 million metric tons in
2005-2006

23. Steel Rollers
 These units roll billets/ingots
 Raw material: Steel billets, ingots, cast
billets and ship plates
 Products: steel bars, flat, tee iron,
channels, girders and wires etc
 Installed capacity is around 4 million
tons
 20,000 labor force is employed

24. Steel pipe industry
 Non-existent at the time of
independence
 Currently its installed capacity is
525,000 tons per year
 Able to produce seem less, seam
welded, spiral welded and arc-welded
pipes
 Approximately 3500 people are
employed

25. Contribution to the
economy
 Manufacturing sector
 Construction sector
 Employment generation
 Taxes

26. Manufacturing Sector
 Share of manufacturing in GDP is 18.2%
 Iron and steel industry is contributing in
3.3%
 Manufacturing sector is grew at 12.6 %
in 2004 to 2005
 Due to law and order situation recently
the production is badly effected

27. Construction sector
 The construction sector growth was
9.2% during 2005-2006
 Enhanced activities in private housing
 Spending on physical infrastructure
 Construction in the earthquake affected
areas

28. Employment Generation
 More than 92,000 people are employed
directly
 14000 jobs have been provided by the
Pakistan Steel Mill alone

29. Taxes (Tax Base)
Categories Units
Manufacturers 599
Importers 451
Exporters 24
Distributers 315
Wholesalers 820
Retailers 51
Total 2260

30. Taxes (Tax Collection)
Categories Units
Manufacturers 1885.2
Importers 34.5
Exporters 0.9
Wholesalers/Distributers 49.5
Retailers 6.2
Total 1976.3

31. SWOT ANALYSIS
 STRENGHTS
 WEAKNESSES
 OPPORTUNITIES
 THREATS

32. Strengths
 High demand
i. From government side
ii. From automobile side
iii. From private sector
iv. From housing sector
 Demand Growth
I. Iron Ore
II. Coal Availability
III. By-products

33. Weaknesses
 Out Dated Plants
 Number of Operational
Manufacture/Process unit Decreased
 Only one world standard Facility of Steel
Production
 Low Per Capita Consumption
 No Training And Research Plans

34. Opportunities
 Utilization of Ores
 Investments
 Export of Steel
 Usage of Iron And Steel in Rural Areas
 Investments in training And
Development

35. Threats
 Privatization of Steel Mill
 Policies of Government
 Law And Order Situation
 Tax System

36. Conclusion
 At current Pakistan is facing sever deficit in steel supply of 5.224 million
ton, and this short fall will increase 12 million tons by the year 2020 until
any new born steel industry could come in to production. Pakistan imports
more the 4.078 million tons of steel products each year to meet the country
demand. If no sincere efforts have been made by the government this
deficit will increase rapidly and would be rather difficult to establish an
immediate steel industry to fulfill the needs.
 In sharp contrast, Pakistan’s crude steel production declined from 1.1
million MT in Fiscal Year-FY2001 to 0.4 million MT in FY2011. Pakistan
had imported 3.2 million MT of iron and steel in 2011 amounting US$2
billion; roughly 5 percent of the annual import bill.

37.  The domestic consumption of steel in Pakistan has grown up to 6-
7millions tons a year, PSM plans to expand her productivity from 1.1
million ton a year to 3 million ton a year
 PSM has already started an indigenous program to utilize locally
available iron ore.
 The expansion plan of PSM productivity and utilization of local iron ore
will definitely cover the deficit in the demand of iron and steel in the
country. But this will require continuous sustainable development and
sincerity of the authorities; even then this will take five to ten years to
achieve the goals.