KARACHI: Pakistan Steel Mills (PSM) has planned to approach the federal government for a Rs 4.5 billion bailout package, including Rs 2 bn for four months salaries (May-August) and the remaining amount for procuring raw material and maintenance.
PSM spokesperson Shazim Akhtar said that the PSM is already in trouble due to almost zero production following reduced gas pressure since June 10.
“Now since blast furnaces are being operated intermittently, PSM has reduced the furnace inside temperature and lancing is being done by workforce manually in this extreme weather,” he said.
He warned that the reduced gas pressure would cause water leakages from the furnace coolers leading to extensive structural damage and may shut down the plant completely.
From Rs18.5bn bailout package approved in April 2014, the spokesman said, Rs9bn allocated for raw material was utilised accordingly and Rs9.5bn was still available in the inventory as steel slabs/finished products.
PSM’s average capacity utilisation for the outgoing fiscal year stood at 25 per cent, in spite of the frequent power outages, reduced gas pressure and shortage of water supplies, besides four months delay in receipt of funds for materials, he added.
He said that the products worth billions of rupees were available in the market, but cheap imported material was affecting their sale.
PSM, he said, has urged the government to impose 30pc regulatory duty, on both boron-alloy HR steel and HR steel, to adjust price differential of imported products available in local market, since its price has been reduced from $530 per tonne in March to $362 per tonne in May 2015.
