Iron and Steel

Pakistan: Amreli Steel to Set Up New Rolling Mill at Dhabeji

Pakistan: Amreli Steel to Set Up New Rolling Mill at Dhabeji
Mining News Pro - Pakistan’s one of leading steelmakers Amreli Steel Limited (ASTL) has announced its third phase of an expansion plan for establishing an additional state-of-the-art rolling mill of another half a million ton bar along with melting facilities using Pioneering Technology at Dhabeji special economic zone (SEZ) at a projected cost of PKR 6.5 billion which will be raised via bank borrowings and internal cash resources.
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According to Mining News Pro -Pakistan’s one of leading steelmakers Amreli Steel Limited (ASTL) has announced its third phase of an expansion plan for establishing an additional state-of-the-art rolling mill of another half a million ton bar along with melting facilities using Pioneering Technology at Dhabeji special economic zone (SEZ) at a projected cost of PKR 6.5 billion which will be raised via bank borrowings and internal cash resources.


In a notification sent to the Pakistan Stock Exchange (PSX), Amreli Steels said the board meeting held on November 8th had approved for setting up an additional state-of-the-art rolling mill using Pioneering Technology at Dhabeji to further expand its rebar manufacturing facilities.


According to the company subject to the approval of technical feasibility and successful financial close, this would help increase existing rolling capacity of the company from 605,000 MTPA to 1,105,000 MTPA and will be finished in three years’ time from financial close.


This expansion makes Amreli the first integrated steel mill in Pakistan to have a melting capacity of over 1 MnT PA. The steel mill seems ambitious to cater for the huge upcoming demand for steel bars with economic and Industrial growth on governments plans of around 5 million unit housing scheme and two huge dams in the north of the country.


“By installation of this new facility, the company will have the largest capacity in Pakistan for producing high-quality rebar with economies of scale in terms of conversion cost,” said the notification.


The notification further said that globally reputed consultancy firms had been invited to submit their bids for final selection to begin the technical feasibility of the recommended project.


The previously approved plan to raise production capacity from 180,000 to 275,000 MTPA at the existing S.I.T.E rolling mill has been scrapped by the company’s board considering the expansion above at Dhabeji.


Consequently, Amreli Steels said there would be no halting of operations for ten months (from June 2019 to March 2020).


Amreli steel observes diversification in its product base - Amreli Steels Limited has diversified its product base, producing billets as well as reinforcement-bars. Capacity for rebar production has grown from 180,000 MT to first 300,000 MT and eventually 425,000 MT and for billets from 100,000 MT to 600,000 MT. Going forward, it intends to expand the CRC capacity to 750,000 MT.


Amreli’s profit surges 109% in Q1-FY19 - Amreli Steels Limited has posted after-tax profit of PKR 409 million for the first quarter ended September 30, 2018, up 109% compared to PKR 195 million in the same quarter last year mainly due to higher prices and volumes.


Sales revenue rose 119% on the back of 27% Y-o-Y increase in average prices with production likely to have gone up 22,000 MT, according to Taurus Research. However, gross margins fell 3.51% points as higher average selling prices were largely offset by almost 40% Y-o-Y rise in the scrap cost.


The key risks for the company include unexpected depreciation of the rupee, a steep rise in scrap prices and more-than-expected slowdown in construction activity.
Inputs – Pakistan Today Profit & The Express Tribune


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