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STRATEGIC MANAGEMENT
REPORT
ON
PAKISTAN STEEL MILLS
BY
AMUN ARIF SIDDIQUI (03)
SABA SHAUKAT (44)
MARIJ ZAFAR (57)
KARACHI UNIVERSITY
BUSINESS SCHOOL
Author Note
BS VIII, Department Of Business Administration, UoK
This report was supported by SIR MUHAMMAD YAMMAN KHAN, Correspondence regarding
this report should be addressed to AMUN, SABA, MARIJ, Department of Business
Administration, UoK-Karachi

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ACKNOWLEDGEMENT
First praise is to Allah, the Almighty, on whom ultimately we depend for
sustenance and guidance. All praises to Allah for endowing us the strength and
ability for completing this report.
We owe many thanks to a great many people who helped and supported us
during the completion of this project. Our deepest thanks to our Course
Incharge, Muhammad Yamman Khan, for giving us an opportunity to do such
work and then for guiding and correcting the various documents of the report
with attention and care. He has given his precious time to go through the project
and make necessary correction as and when needed.
We express our thanks to Karachi University Business School, University of
Karachi for extending its support for granting us permissions and letters for the
report.
Also, we would like to thank all those links and contacts who helped us
gathering up the data and making it an ease for us in completing this project.

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EXECUTIVE SUMMARY
The iron and steel industry holds the key to the sustained growth of the engineering sector
and hence, to the development of the economy as a whole. As such the steel industry can be
termed as the ‘mother industry’ to all modern industries, being the basic source of metal for
them. In this perspective the importance of national assets such as Pakistan Steel, which is
determined on their strength and ability to sustain the national growth rate, need not be
emphasized.
What we really see is an association obliged in the limitations, genuine blunder, wrong
arrangement choices and absence of government backing. The association is currently
attempting to get back on its feet and has received the procedure of complete rebuilding and
redesigning of offices, funds and work force to set the pace for development and
advancement.
In the report we have attempted to dissect and assess the PSM and its execution. The report
has been arranged in a way to complement the issues that prevent advancement and
progression in this industry and contains opportunities accessible to redress the weakening
circumstance at present. It contains a detailed discussion of the present status of the PSM
furthermore the explanations behind its disintegrating condition.

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TABLE OF CONTENT
S.NO TOPIC PAGE
1- Acknowledgement……………………………………………………………………2
2- Executive Summary…………………………………………………………………..3
3- PSM At A Glance…………………………………………………………………….6
4- Background And History……………………………………………………………..7
5- International Scenario…………………………………………………………………9
6- Process And Products: ……………………………………………………………….15
7- Production Process At Psm: …………………………………………………………19
8- Raw Materials………………………………………………………………………..21
9- Departments Of Psm: ………………………………………………………………..24
I) Human Resource Department………………………………………………..25
II) Accounts Department………………………………………………………..32
III) Marketing Department……………………………………………………….50
IV) Finance Department………………………………………………………….52
V) Information System And Management Department…………………………56
10- Services PSM Offer………………………………………………………………….59
11- SWOT Analysis Of PSM…………………………………………………………….60
12- PEST Analysis Of Steel Mills……………………………………………………….67
13- Imports Of PSM: …………………………………………………………………….70
14- Financial Analysis……………………………………………………………………74
15- Performance Review…………………………………………………………………81
16- Organizational Health And Safety In PSM: …………………………………………85
17- Case Of Privatization ………………………………………………………………..94
18- Black Listed Firms Of Pakistan……………………………………………………103
19- Ethical Practices Of Pakistan Steel Mills…………………………………………..110

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20- Unethical Practices Of Pakistan Steel Mills……………………………………….113
21- PSMC As A Social Responsible Organization: …………………………………...118
22- Issues At PSM……………………………………………………………………..124
23- Measures To Eliminate Problems………………………………………………….132
24- Pakistan Steel Mills: What The Future Holds? ……………………………………144
25- Collaborative Bargaining Authority………………………………………………..150
26- Interview Questions……………………………………………………………….154
27- References………………………………………………………………………….159

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PSM AT A GLANCE
PSM, the main coordinated iron and steel works of the nation had been built up as a base for
the building business, a reason that it has served well. PSM that was initiated in 1985 has
composed limit of 1.1 million tons every year. A fast development of the designing business
is clear from the increasing interest of steel in the nation which PSM is not in a position to
meet due to its constrained limit and thus is looking forward for extension in its ability.
Situated at a separation of 40 km South East of Karachi at Bin Qasim in close region of Port
Muhammad Bin Qasim, is a beach front site which lies on the National Highway is connected
to the railroad system. PSM is spread over a zone of 18,600 sections of land (around 29
square miles) including 10,390 sections of land for the primary plant. It’s emptying and
transport framework at Port Qasim is the third biggest on the planet and its modern water
store with a limit of 110 million gallons for each day is the biggest solid repository in Asia. A
2.5 kilometers in length seawater channel interfaces the plant site to encourage the ocean
water flow framework with 216 million gallons for every day.
The most generally utilized and demonstrated course for iron and steel making i.e. propelled
impact heater innovation for iron making and Basic Oxygen Furnace/Linz-Do-nawitz
Converters for steel, making with current constant throwing offices has been received for
PSM. Coordinated with the principle plant are the Coke Oven and By Product Plant where
Coking coal is changed over into coke. Current systems, for example, dry extinguishing of
coke, utilization of regular gas infusion, oxygen improvement of the impact, high top weight
and high impact temperature in the impact heater have been given. PSM's item blend includes
moved billets, cast billets, hot-moved sheets, cool moved sheets, stirred sheets and framed
areas. Moreover, pig iron and metallurgical evaluation coke are likewise delivered yet are to a
great extent implied for inside utilization. The overabundance amounts of these items are, be

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that as it may, sold in the nearby market. Likewise granulated stone slags, coal tar and
ammonium sulfate are, additionally acquired as by products.

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BACKGROUND
AND HISTORY

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BACKGROUND AND HISTORY
The foundation stone of the Pakistan Steel Mills was laid on 30th December 1973. The
engineering goods industry is recognized in the world as most critical for the development of
a self- reliant and vibrant economy. This industry however depends heavily on basic metals
industry, especially the iron and steel industry for the supply of resource inputs. The
development of the economy as a whole depends on the iron and steel industry which in turn
helps the growth of the engineering sector in the economy.
For quick industrialization the requirements are a generous supply of steel, adequate force
and satisfactory transport framework. In the mid 70's the absence of a propelled designing
and metal part was starting to demonstrate its unfriendly consequences for the general
modern division in the economy. The nation confronted different difficulties as to the import
of steel and iron. At a certain point a stage had come where the import bill for these inputs
couldn't be met with the money related assets accessible in the economy and the nation
started to give genuine thought to this issue. The time had seek Pakistan to have its own
particular iron and steel making plant to decrease its dependence on the import of these
extreme key inputs for the industrialization of the entire economy.
The issue was on the papers when the First 5-Year Plan was reported, yet was confronting
amazing debate and was not given its due significance. For about 2 decades questions with
respect to the crude material necessity, item range, plant site, and apparatus buy, metal needs,
possession examples and above all remote financing, were raised and stayed unanswered.
In 1968 the PSM Corp. was set up in the private segment with the sole reason for building up
a steel fabricating industry at Karachi and different parts of the nation. In January 1969 the
PS finished up a concurrence with V/O Tiajpromexport of the then USSR, for planning of a
plausibility report for the foundation of such an industry at Karachi. In 1971 the USSR

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consented to give techno-money related help to the development of a beach front – based
coordinated steel factory at Karachi.
Under the general supervision of Russian specialists, a consortium of neighborhood
development organizations did the development. The arrangement incorporated the
advancement of the fundamental assembling units as well as related foundation offices.
There were general 20 segment units of the PSM and the first unit to begin creation was the
Coke broiler and By-item plant and the Galvanizing unit the last. The dispatching of the Blast
Furnace unit in August 1981 denoted Pakistan's entrance into the club of iron and steel
creating countries.
INTERNATIONAL SCENARIO
Ø Production
The steel industry worldwide produces over 750 million tons of crude steel each year (based
on average annual production in the past decade). The largest steel producing countries are
China, Japan and the United States, which each produce around 100 million tons of the above
total Russia, Germany and Korea each produce around 40-50 million tons. Stainless steel
production has climbed rapidly in the past decade: over 25 million tonnes of finished stainless
steel were produced in 2007, compared to 13 million tons in 1988 – an increase of more than
23 percent. Production has increased by more than 50 percent in Europe and Asia in that
period. The largest stainless steel-producing countries are Japan (nearly 8 million tons), the
United States (4 million tons), and Germany, Korea, Italy and France, each of which
produced over 2 million tons of finished stainless steel in 2007.

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Production(million metric tons) 2008 % of Total
EU (15) 150.0 19.2%
Other Europe 75.7 9.7%
Former USSR 163.0 20.9%
NAFTA 113.3 14.5%
China 59.4 7.6%
Japan 105.7 13.5%
Other Asia 54.4 7.0%
Others 58.6 7.5%
Africa 13.4 1.7%
Middle East 3.3 0.4%
Central and South America 34.9 4.5%
Australia and New Zealand 6.9 0.9%
World 780.1 100.0%
Production(million metric tonnes) 2008 % of Total
EU (15) 159.9 20.6%
Other Europe 47.5 6.1%
Former USSR 74.4 9.6%
NAFTA 127.8 16.5%
China 114.3 14.7%
Japan 93.5 12.1%

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Other Asia 90.4 11.7%
Others 68.0 8.8%
Africa 12.0 1.5%
Middle East 9.1 1.2%
Central and South America 37.4 4.8%
Australia and New Zealand 9.6 1.2%
World 775.9 100.0%
World Total: 780 million metric tons in 1988, which was 775.9 million metric tons in 1998.
Ø Consumption
Steel use in any country is closely linked to its economy, with the largest consumption in the
wealthiest countries of the world. Steel consumption of finished steel products ranges from
approximately 20 kilograms per person per year in Africa to around 340 kg in Europe, 420 kg
in the North America and 635 kg in Japan. However, the largest consumers are in Asia:
Singapore (1,200 kg/capita), Taiwan (over 970 kg) and Korea (830 kg). Per capita
consumption is climbing rapidly in Asia due to investments in industry, transport,
infrastructure, construction and overall improved standards of living. For example, in the past
decade, per capita consumption has risen by nearly 470 % in Malaysia, 240 % in Korea, and
nearly 80 % in China.
Consumption 2008 % of Total
EU (15) 129.6 16.6%
Other Europe 66.4 8.5%
Former USSR 164.7 21.1%

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NAFTA 132.8 17.0%
China 69.6 8.9%
Japan 86.9 11.1%
Other Asia 71.9 9.2%
Others 58.8 7.5%
Africa 15.3 2.0%
Middle East 11.4 1.5%
Central and South America 25.1 3.2%
Australia and New Zealand 7.1 0.9%
World 780.7 100.0%
Consumption 2008 % of Total
EU (15) 136.1 19.7%
Other Europe 35.2 5.1%
Former USSR 29.6 4.3%
NAFTA 144.3 20.9%
PR China 113.9 16.5%
Japan 70.3 10.2%
Other Asia 101.6 14.7%
Others 61.0 8.8%
Africa 15.2 2.2%
Middle East 11.4 1.6%
Central and South America 27.9 4.0%

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Australia and New Zealand 6.5 0.9%
World 692.0 100.0%
Ø Employment
Steel production in the world has risen by approximately 30 percent in the past 25 years. In
the same period, estimated employment in the major steel-producing countries (excluding
China) has fallen from around 2.5 million to 1.3 million people. This enormous reduction has
been the result of major investments by the world’s steel makers in modern steelmaking
processes and technologies. The new technologies not only improve productivity but also
increase yield efficiency while reducing resource consumption and the environmental impact
of the steel-making process.
Ø Process and materials
It is some of the time contended that it is "better" to make steel by means of a specific
procedure course, whether the customary "incorporated" course (utilizing coal, iron mineral
and scrap) or the "electric circular segment heater" course, which uses scrap as its
fundamental crude material. In all actuality, both courses are legitimate, contingent upon
nearby circumstances, including such elements as accessibility of scrap and other crude
materials; neighborhood vitality expenses; scrap costs, neighborhood workforce abilities, et
cetera. Creation additionally contrasts as indicated by the sorts of steel required, from the
essential levels for substantial development uses to the most particular custom steels. While
the assembling materials accessible to man changed little for a long time, the last 50% of the
twentieth century has seen a gigantic convergence of new and energizing materials. The
universe of steel is no special case.

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Steel is not a solitary material, but rather an unlimited scope of distinctive materials
continually advancing as steel applications develop. For instance, more than 80 percent of the
steels utilized as a part of vehicles creation today did not exist ten years back. In car as in
different applications, steel creators are constantly working in a joint effort with their clients,
enhancing and altering their items, and making imaginative new steels.
Ø Environmental Issues
Is a required and fundamental segment of new steel, making steel an actually ecologically
capable material? In fundamental oxygen steelmaking, scrap demonstrates to up to 30 percent
of the crude materials dashed into the heater. It demonstrates somewhere around 90 and 100
percent of the charge in EAF (electric circular segment heater) creation, which is additionally
the chief course for stainless steel generation.
Steel is 100 percent recyclable: in addition, it can be utilized again and again with no
minimizing to a lower quality item. Steel's attractive properties make it easy to remove from
different materials for reusing. Around 350 million tons of steel scrap is reused every year.
Stainless steel is an extremely important item and thus, is totally reused.
There is no element to clarify the numerous natural changes accomplished by the steel
business as of late. One pattern has turned out to be clear on the other hand: the steel business
has moved its center from end-of-channel gathering of outflows to considering changes at
each and every phase of the steelmaking procedure. Steelmakers have in this manner
accomplished much further outflows diminishments by putting resources into general cleaner
creation, better support and enhanced practices. New innovations, working practices, worker
training and administration consideration have all been vital.

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Huge numbers of the enhancements have come about because of substantial venture
programs. It is evaluated that no less than 10 percent of all steel industry capital uses have
been particularly on environment change – or more than US$ 20 billion in the most recent ten
years alone. This is more likely a misjudgment, since it does exclude interest in new
steelmaking procedures –, for example, constant throwing, fragile section throwing or coal
infusion – which empower much cleaner innovation to be present.
PROCESS AND PRODUCTS:
Steel is a metal made out of iron in addition to fluctuating measures of carbon and in addition
different components, for example, chromium, nickel, molybdenum, zirconium, vanadium,
tungsten, and others. Distinctive sorts of steel – that is, steel with diverse properties and
attributes – are created by changing the substance and adjusting any of the diverse phases of
the steelmaking procedure, for example, rolling, finishing and heat treatment. As each of
these variables can be altered, there is possibility for all purposes and no restriction to the
quantity of distinctive steels that can be made. Right now there are more than 3,000 classified
evaluations accessible (concoction organizations) of steel, not including those made to take
care of custom demand, going from essential evaluations, (for example, for railroad tracks) to
refined high-combination and stainless levels for particular application.
Products and Applications:
Steel slabs billets and blooms are known as semi-finished products. Finished products include
hot- or cold-rolled flat products (such as plates, coils or sheets) and hot-rolled long products
(such as wire, bars, rails or beams).

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Steel is used in a vast array of products. The largest markets for steel are construction
(buildings, transport infrastructure, etc.), automotive and packaging. Electronic components,
industrial equipment and medical applications are also important markets, particularly for
special steels and stainless steels.
Common Uses of Steel:
Look around you and you'll discover illustrations of steel uses all around: in street, rail and
extension structures, sustenance and refreshment jars, autos, development components, for
example, fortified solid dividers and columns, bikes, planes, and in an unlimited cluster of
different items. You'll discover steel in decorations (work areas, file organizers, handles,
pivots, bolts and keys, light fittings, blind rails, seat and table legs, and so on.), office things
(PCs, paperclips, staples, diskettes… ), or in engines, cellular telephones, mechanical
apparatus, flagpoles, lawnmowers. It is difficult to envision a world without steel.
A significant number of the things you utilize each day are made of stainless steel, which is
both hard wearing and wonderful. It's utilized as a part of individual embellishments (glasses
edges, watches, buttons, zippers, keyrings… ) and family things (cutlery, sinks, pots and
utensils, apparatuses), and it is prized by inside fashioners for use in current furniture, lights
and enlivening components. Stainless steel is additionally significant in profoundly
concentrated applications: it's exceedingly safe and simple to clean surface make stainless
steel to a great degree hygienic. It is in this manner utilized broadly as a part of doctor's
facility and sterile situations, sustenance handling plants, eateries, etc
Uses of Steel Products:
PSM products are used as process materials by the engineering industry in producing a
variety of finished steel products. The following are some of these uses:

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COKE:
 Melting iron scrap
 Carbonization in sugar mills
 Producing calcium carbide and other chemicals
PIG IRON:
 Iron and steel castings
 Equipment components
 Ductile iron pipes and pipe fittings
BILLETS:
 Steel rails and reinforcement bars
 Twisted and ribbed bars
 Rods and wire rods
 Seamless pipes and gas cylinders
HOT ROLLED COILS/SHEETS:
 Storage tanks
 Seam welded pipes for gas, water and oil
 Ships and launches
 Fabricated structures and welded beams
 Wheel rims
COLD ROLLED COILS/SHEETS:
 Steel pipes
 Tin plates
 Steel furniture
 Oil and gas appliances

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GALVANIZED COILS/SHEETS:
 Roofing, shuttering, paneling
 Buckets and tubs
 Air conditioners and water heaters
 Fresh water tanks, ducting and home appliances
PSM meets its raw material requirements both from local and foreign sources. Locally
available materials include:
 Limestone dolomite
 Fireclay
 Bauxite
 Magnetite
 Chromite
 Fluorite
The basic minerals such as iron ore and coking coal are imported due to their non-availability
in appropriate chemistry, quantity and quality locally.
Major raw material requirement at full production level is given below:
IMPORTED ITEMS AT 1.1 MTPY( in 000 tons)
Coking coal 1050
Iron ore 1910
Manganese ore 28
Ferro manganese 6
Ferro silicon 3

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Aluminium 2
Fluorite 5
Zinc 3
LOCAL ITEMS AT 1.1 MTPY( in 000 tons)
Limestone 390
Dolomite(sinter grade) 185
Dolomite(refractory grade) 46
Refractory clay 28
Silica sand 19
PRODUCTION PROCESS AT PSM:
The most widely used and proven route for iron and steel making i.e. advanced blast furnace
technology for iron making and Basic Oxygen Furnace/Linz-Donawitz Converters for steel
making with modern continuous casting facilities has been adopted for PSM. Integrated with
the main plant are the Coke Oven and the By-Product plant where coking coal is converted
into coke. Modern techniques such as dry quenching of coke, use of natural gas injection,
oxygen enrichment of the blast, high top pressure and high blast temperature in the blast
furnace have been provided.
Full facilities have been provided for the handling of the following:
 Bulk raw materials
 Blending
 Preparation of calcined lime
 Alloy additions
 Sintering

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 Iron making
 Steel making
 Rolling mills
Mass crude materials (iron metal, coking coal and manganese mineral) are being imported by
40000-45000 DWT vessels amid the rainstorm season and by 50000DWT vessels in alternate
months. Since the middle of 1980 these material are emptied on the mineral and coal
breakwater at Port Qasim by method for 2 automated unloaders. These have a limit of 1000
tons for each hour and can exchange specifically to the plant site through two billet transports
and two plant transports 4.5 km long. These transports have a width of 1200 mm and a limit
of transporting 1200 tons of iron mineral and coal every hour. At the plant site iron metal and
coal are put away in distinctive stockyards which have a capacity limit for adequate materials
to keep going for 90 and 45 days individually.
Its unloading and transport framework at Port Qasim is the third biggest on the planet and its
mechanical water repository with a limit of 110 million gallons for every day is the biggest
solid store in Asia. The utilization of out of date hardware lessens the gainful effectiveness of
PSM. The association has not kept up the hardware and procedures according to the norms
set by the makers of this plant. Rather than the essential oxygen heater innovation utilized by
70% of the steel assembling procedure different routines, for example, direct oxidization and
actuation strategies ought to be embraced to help with limit development and expanded plant
usage.

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RAW MATERIALS
INPUTS
Scrap softening has turned into an essential piece of the nation's steel industry with a specific
end goal to increase steel generation. Crude materials for both procedures (instigation and
circular segment) are the same. All evaluations of scrap (with the exception of cast iron
turnings) can be dissolved in Induction Furnaces to deliver mellow steel (MS) ingots or
billets once they are free from rust and dust. Creation expense of Induction heaters is to some
degree less by virtue of:
 Low melting loss because the loss of Fe in the form of FeO is negligible
 Metal is not exposed to Arc (3,000 degrees Celsius) thereby minimizing the oxidation
of metal
 No loss of metal during slag removal
 Lower power consumption
The main raw material is iron and steel scrap. At 100 % capacity utilization the project will
need 67,089 tons of scrap (inclusive of 7% wastage) to produce 62,700 tons of billets. In
addition it will also require other inputs:
Mineral / Chemical At 100 % Capacity
Ferro Silicon 160 tons

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Aluminium 35 tons

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DEPARTMENTS
OF PSM:

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DEPARTMENTS OF PSM:
HUMAN RESOURCE DEPARTMENT
Pakistan Steel, the largest public enterprise in Pakistan, in addition to its vital role of
industrialization in the country as the requirement of developing a large contingent of skill
manpower. To accomplish this objective, the organization built up an undeniable Human
Resource Development Department with the errand of arranging, assessing, preparing,
profession arranging and improvement of labor to the different coordinate units of Pakistan
Steel. The induction of workers as a vast size combined with serviceable diversities, for
example, those of a coordinated Steel Plant and in count of fundamental useful abilities in the
greater part of its multi-measurement aspects as to make it vital for this division to create far
reaching and sweeping blue-print for labor improvement.
02. in the procedure of enlistment, preparing and advancement of labor to Pakistan Steel,
the division as topped all the accessible assets in the nation, depended intensely on source on
board and inventive infra-auxiliary offices with in the premises of Pakistan Steel to give
suitable natural and physical conditions for preparing and procurement of essential useful
aptitudes and socialization inside of organization environment with individual activity,
delayed experience and help from Soviet Union and other guide giving offices like UNDP,
UNIDO, and ILO, we have come to a phase of development where we can deal with any
appraisal of labor improvement for open undertakings, both in Pakistan and abroad.
03. Manpower prerequisites of Pakistan Steel have been tune of 13,000 to 14, 000
personnel, and all-inclusive of both classes of specialized and non-specialized
representatives. The accessible preparing offices inside the nation did not have the ability to
give such a substantial number of pattern labors as indicated by timetable of prerequisites.

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The primary reason was the non-presence of preparing offices identified with different
specific field of an incorporated steel plant in the foundation of Pakistan.
04. The Directorate of Human Resource Development under the supreme command of
Engr. Absar Nabi, Director (HRD) and now comprises of the following specialized units
encompassing training and development of all categories personals:
ü Pakistan Steel Institute of Technology (PSIT)
ü Training Wing
i) In-Plant Training Section
ii) Foreign and Local Training Section
iii) Management Development
i. Pakistan Steel Institute of Technology (PSIT)
The Institute was established in 1976 and is a full flagged institution with modern training
aids/equipment is performing with modern functions.
PSIT is the largest industrial training establishment of the country with the facility to impart
training in over 75 specialized trades of steel production and allied industrial corporations.
PSIT with its capacity to trend 1200-1500 artisans per annum on two shift basis.
Education process in PSIT is being carried out according to Soviet Vocational and training
system, education plan and curriculum. The education program consists of theoretical studies,
work shop practice and on the job training.

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The training methods adopted by the institute are modern and pragmatic, class rooms lectures
and based on planned lessons backed by group decision. Extensive use of modern audio
visual aids is made which includes working models and slides projectors, record player, tape
recorders and close circuit video tape equipment.
Three types of training facilities are provided for:
Ø Six month duration of training, the first three months training in PSIT 50% theory and
50% work shop practice, followed by on the job training for another three months.
Ø One year duration of training out of which 09 month training are PSIT training 50%
theory and 50% work shop practice, and remaining three months on Job training at plant.
Ø Two years duration of training out of which 18 months training are in PSIT 50% theory
and 50% work shop practice, followed by six months on the job training at plant.
Ø The maximum educational requirement for admission to PSIT is matriculation with
science group. The candidates must be 16-21 years of age and physical fit.
Ø In 1985 PSIT started three years Diploma of Associate Engineer courses having six
semester in Metallurgy, Electrical, Electronics, Mechanical, Chemical and Air-conditioning
& Refrigeration, Technology, affiliated by Sindh Board of Technical Education (SBTE). The
induction of the students is being made in every year in the above fields as per academic
season of SBTE, the criterion of selection is maximum 21 years and matriculation in science
group in ‘C’ grade.
Ø Therefore, the Institute is one of institutes which conduct diploma classes in Metallurgy
being associate with the largest metallurgical establishment in the country

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Ø All activities of the Training Institute are controlled by Engineer Mushtaq Ali Memon,
Principal (PSIT), of HRD Department.
Ø The work shop in the training institute have been organized and established on the
principles of industrial hygiene, safety and efficiency. Each of the work shop are spacious,
properly ventilated and adequately furnished with modern equipment, machinery, visual aid
and materials which are prerequisites for training of high standard.
Ø The machinery and equipment installed in PSIT includes electric resistance furnace, heat
treatment furnace, forging hammers, presses, lath machines, grinder, milling machines,
shaper planer, hardness testing machine, tensile testing machine, gas and electric welding
equipment, Electric motors, generators, transformers, rectifiers, different type of motors,
resistances, control switches starters, panel boards, switch gears, relays, damage detection
machine, electric winding machine, drill machine, muffle furnace, primary and secondary
gauges, level indicators, different types of regulators, general electric motor, oscilloscope,
grinding machines, etc.
Laboratories
There are Four Laboratories which includes, Electrical, Chemical, Automation &
Control & Computer Lab etc. Each of these laboratories are equipped with precision
instruments, testing equipment, working & still models of the instruments, instrument panels,
circuits & circuits diagrams of different equipments & Machinery. All these facilities are
made available for assembly, practice & repair to the trainees.
Library
The library gives course book administration to the understudies. It additionally has a
reference segment, a periodical areas and a general perusers administrations. More than four

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thousand duplicates of around twenty three reading material are keep up in the library for
circulation among the understudies and individuals. The library subscribes to more than ten
periodical and around a quarter century diaries identified with different field of building and
Technology. These are consistently circled among the authorities of Pakistan Steel and
recorded in the library for reference. The appropriation of different daily paper among the
officers of the enterprise is additionally one of its capacities. The store segment of the library
is rich Encyclopedia, Hand Books Reference, Catalogs, Standard Hand Reports, Large
number of guests from diverse units of Corporation visit the library to advantage of area.
Auxiliary Facilities
The Institute has facilities of Auditorium, with a sitting capacities of 500 audiences,
equipped with hi-Fi sound system & 35 mm projector, Dinning facilities with Executive
Dining Hall, Officers Mess & a Students Canteen are also housed in the same building.
Manufacturing of Spare Parts
An Institute production unit is established in to utilize workshop facilities in their
space time and is producting about five thousand Kg spare parts for different complexes of
plant through CMD each month. It required to collect material and deliver finished goods to
various concerned production units.
Therefore PSIT is one of the Institute of Pakistan Steel which conducts diploma
classes in Metallurgy being Associate with the largest Metallurgical establishments in the
country.
ii. In-Plant Training Section
In plant preparing segment of HRD Department was set up in 1980 is in charge of arranging,
Methodical direction, Assistance and Monitoring of shop floor preparing of every single

30. Page | 30
specialized framework of Pakistan Steel by shop floor designers and foreman. It guarantee
conferring employment situated and creation arranged learning and abilities to operational
units. This framework satisfies genuine and watched preparing needs of different units in
view of their occupations determination capacities under the immediate direction and control
of generation administration.
It oversees preparing for operational and specialized staff at shop floor and so on to setting up
of perpetual abilities structure for quality generation in plant of different operational units of
specialized work power in all the complex of Pakistan Steel is being directing according to
arrange arranged by individual office. There is a built up arrangement of in plant preparing in
the different incorporated units of Pakistan Steel group of profoundly gifted and prepared
shop coordinators, shop speakers and shop educators for JOs, supervision talented laborers,
semi gifted specialists on the shop floor. This movement at present includes 91 exchanges 28
operational units.
Internship Trainings
With an intention to participate in the development of Human Capital of the country HRD
Department providing internship training facilities as per existing policy to the nominated
students engineering and non-engineering of various universities/ Institutes of the country, so
that the student/Internee can able to get in depth practical knowledge of their relevant field.
Management Development Centre
Change has turned into a lifestyle in the advanced modern associations. Those people accused
of the administration of the make and market capacities inside of the mechanical are finding
that the conventional strategies arranging an executing choice and additionally everyday

31. Page | 31
sorting out and working techniques of the undertaking are not intended to work successfully
in such an evolving atmosphere.
Administration any associations mean understanding, present day devices and systems. Since
aggressive environment had change the implications and comprehension of administration
practices. Administration Training exercises at Pakistan Steel began picking up force in mid
1982 when it was chosen to build up an undeniable administration advancement focus to
begin administration preparing on in association premise. Thusly, taking care of these
capacities is a piece of MDC procedure. Further more MDC is far reaching coordinated
framework for adequately dealing with the work power in the endeavors to accomplish
authoritative objectives. This framework has convention rear way set take after the
arrangements in the accompanying territory of:-
 Current Management techniques (Linked with HR).
 Global Technological Initiatives and Inventions.
Internationals Quality Standards/Total Quality Managements.
In this connections, adequate activates has also been developed to conduct the in house
courses/seminars/workshops/presentations are to equip the employees of Pakistan Steel to
cope successfully with the management challenges of to to day’s ever changing industrial
environment.
iii. Foreign & Local Training Section
Its manage for officer & staff, short training courses, seminars, workshops & symposium of a
duration ranging from 1-5 days and also 5-20 days like federal civil defence training school

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& on various management disciplines and also on technical subjects being conducted by
professional raining bodies in the country such as PIM, NIPA, NILAT, EFP, ICMAP, PIQC,
AEROCAR, Pakistan Manpower Institute etc.
It also process foreign training cases (Technical & Management) Seminars, Workshops,
Sponsored by foreign donor agencies like JICA, APO, UNIDO, Foreign Governments
through Ministry of Industries & Productions Islamabad.
ACCOUNTS DEPARTMENT
The Pakistan Steel Mill’s accounts department consist on nine different sections, and all of
these are describe below with their purpose and functions in detail.
1. Bills Section:
Bills area keeps up a wide range of bills of Pakistan Steel identified with every one of its
costs and utilities. This specific area likewise partitioned into six sections to well deal with
every one of the bills. These areas are portrayed as takes after;
a. Incidental: Miscellaneous work to record assortment of little size of bills, for example,
container, stationery, and so forth. They enter item code number, its date of installment,
amount, and sum which must be paid.
b. Therapeutic: Medical area deals with the specialist's bills that give their support of Pakistan
Steel workers. These specialists might possibly have a place with relegate boards of Pakistan
Steel however as the send their bill which will have coordinated with representative
solicitation for restorative office. After that specific process the required sum will paid to
specialist by Pakistan Steel through cheddar.

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c. Import: In import, letter of credit, bills office get record from money office, who notice to
whom L/C has been opened. They record every one of the particulars of the request both in
physically and digitally, and issue charges appropriately.
d. Supplier: Here they recode appliers' bills, which item, sum, and amount of the item
suppliers have been supplied to the Pakistan Still Mill and the amount they are committed to
pay them. They check all the important necessities for issuance of the bills in addition to with
past equalization (if any) of the supplier.
e. Duties: Taxes area simply recognized assessment from the bills they have gotten from
different offices and make a point to citizen that their expense to govt. of Pakistan has been
paid from Pakistan Still. Every one of the charges have been recognized by current expense
rate issued by the govt. of Pakistan.
f. Terminal: The terminal in bill area backing and it is being used of Information System
Management (I.S.M.) to give crucial data so as to make Pakistan Still paperless association.
In it, they up-date all the bill area exercises on centralized server, from which all worry
divisions gathers their data as per their need.
2. Advances Section:
Advances segment gives a fix measure of cash as indicated by the cost. They handle all P.S.
(Pakistan Still) division as indicated by their portray limits for the cost.
Keeping in mind the end goal to manage different sorts of advances, advances area made
three distinct sorts of development records;

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i. Imprest Account ii. Day by day Expense iii. Advance Against Expenses
There point of interest is given as takes after;
i. Imprest Account: The requirement for Imprest Account was felt when the item was
required on earnest bases and it was not accessible in store. Along these lines, it is such sort
of dire or crisis represent apportioning cash-flow to asked for office.
Imprest record work under record office, in which a sure measure of cash permitted to all
offices inside P.S. as indicated by their crisis required cost. It works under specific situations
when some item is desperately required without that the hardware will quit working and that
item is not accessible at present in store. To safe from stoppage of apparatus and long
customary buy through delicate, imprest accounts thought comes. In which concern division
feels its solicitation for specific parts or item and submit it to accounts dept. who will
designate their asked for cash in like manner.
If there should arise an occurrence of surpass solicitation out of their allot limits for cash; the
recipient dept. will need to get uncommon authorization from administrator.
ii. Day by day Expense: For the workplace reason, if worker make visit to outside the
workplace or city or even nation, then P.S. is mandatory to pay his or her meeting cost. To
car up with this case Advance Section has made day by day cost account which is comprise
upon three unique breaking points,

35. Page | 35
a. Consistent T.A. and D.A. mean travel stipend and day by day remittance. This office
provides for representative when he/she travel and/or live outside office premises for
employment purposes.
b. Exchange T.A. and D.A. implies for the situation if worker exchange starting with one city
then onto the next city by the association for work reasons, then association will be required
to pay him half of his fundamental compensation. Furthermore, on the off chance that he is
exchange with his family then he will be ponied up all required funds his fundamental pay.
c. Remote T.A. and D.A. for remote visit, which is generally done by administrators for
office work, P.S. will pay those remittances in dollar coin for their travel and every day costs.
Pakistan Steel process additionally encourage to their worker to profit them chance to take
propels, which they are compulsory to pay after fix time period. On the off chance that they
would not pay after fix time limits them P.S. has the privilege to recuperate their advances
from their compensation.
3. Taxes Section:
Expenses are one of the huge things for government to produce salary. Everywhere
throughout the world governments charge charges from all individuals living inside of their
nation through distinctive approaches to satisfy their different costs, for example, pay, base,
security, and so on. There are numerous sorts of charges, for example, wage charge, deals
expense, and extract obligation. Some of them are government charges and some of them are
commonplace assessments. Pakistan Steel plant, as the huge maker in Pakistan identify
diverse expenses before offering the item to their buyers.

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They are majorly managing two duty divisions, which are clarifying as takes after;
i. Wage Taxes: When we discuss corporate wage charge it means charge on corporate's
acquiring. As indicated by Pakistan's wage charge law, any corporate who produce benefit in
a monetary year must pay 35% as a wage expense out of its benefit.
For the situation if corporate does not gain benefit inside of it's monetary year then it will
compulsory to pay 1% charge on it's "Net Sales + Other Income".
As the P.S. is a major association, and it has authorization to recognize assessments of it
purchasers in the interest of legislature of Pakistan, so make charge gathering proficient, P.S.
pay assessments to Federal Bureau of Revenue (FBR) in four quarters in a year. Pakistan
Steel's wage duty incorporate
Advance-able Return
Salary Taxes (above Rs. 25,000/-)
Customers Purchases
ii. Sales Taxes: Sales taxes charge on three months notes on Credit Receive-able when the
debit is.
Refund only related items to finished products after chemical examination
Sales tax and excise duties are refundable but custom duty is not refunded.
4. Funds Section:
Pakistan Steel as a dependable association and working in the advantages for every one of its
partners including industry, nation, society and in addition for its worker. As it perceive and

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value it representative's endeavors to take P.S. on major identifiable position in nation's
welfare, it give them different sorts of assets to bolster them fiscally. There point of interest is
given as takes after;
i. Provisional Funds: Provisional asset is a sort of asset which works like a sparing
record for just perpetual representatives not for contract day by day compensation individual.
In this record 10% of worker's fundamental compensation identified and saved into it, this
measure of cash representative can take any pull back whenever.
• After entry of three years association will likewise contribute same measure of cash
which is equivalent to his/her 10% fundamental compensation.
[Note: Employee would not permitted to pull back those sum out of cash from his/her P.F.
which is contributed by firm, this will just given to him on his retirement.]
Worker has two choices when he is opening his P.F. account, with interest or not.
1) For the situation of interest, if worker withdrawsP.F. 9% advance then on that specific
measure of cash and not submitted inside of one month then 4% loan fee will be charge and
this will bit by bit increment till completely not submitted.
Then again the advantage of interest record is that on P.F. premium additionally expands
sparing cash of the worker.

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2) On the other side, where representative's P.F. record is not on interest advantage. At that
point it will be basic record on which no premium charge on taking advance and/or no any
increment in sparing cash.
• Another purpose of consideration is that when worker pass 50 years of his age and
pull back cash from P.F. at that point it will be non-refundable.
• P.F.maximum requires 48 installments.
Welfare Fund:
The purpose of welfare fund is to facilitate its members to avail loan without charging
interest. The amount of loan is separated according to the position or grade of personal. a.
Rs.30, 000/- for under 16th grade personal which will recover with Rs.1, 000 /- installments
per month. b. Rs.60, 000/- for above 16th grade personal which will recover with Rs.1, 500 /-
installments per month.
Welfare fund also give Rs.35, 000/- to dependents on the death of his member.
Membership of welfare fund is only available to the percentemployees of P.S. it are not for
contract and daily wages employees.
There are three options available to refund loan, it can be submitted through;
a) Cheque
b) Payroll
c) Voucher
iii. Benevolent Fund:

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Benevolent fund means the amount of money given to dependents of the employee on his/her
death which occurs during period of employment. The purpose of benevolent fund is to help
employee’s family financially on his death and give feeling of security to employee during
his employment.
Benevolent fund’s facility is only available to percent employees; this facility is not for
contract and daily wages employees.
Benevolent Funds for Officers
ifferent categories according
to employment grades, which is given below;
Junior Officer -25
Assistant Manager -30
Duty Manager -35
Manager -40
Duty General Manager -45
General Manager & Above -50
There are certain pay range limits are describe from which the fix amount for benevolent
fund will be detected for officers which is describe below;
Pay Range Monthly Benevolent
Rs.2001 to 2500/- Rs.990/-
Rs.10001 to above Rs.4260/-
[Note: Benevolent fund is only given on occurrence of the death during working period. It is
not given on natural death.]
Benevolent Funds for Workers

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For workers benevolent funds range is;
i. Workers 25-35
There are certain pay range limits are describe from which the fix amount for benevolent
fund will be detected for workers which is describe below;
Pay Range Monthly
Benevolent
Rs.2000 to 5001/- Rs.700 to
1100/-
[Note: Benevolent fund is available for all workers but they must qualify 180 days job
without leave.]
iv. Worker Profit Fund:
Worker Profit Fund (W.P.F.) means corporate profit will be share with workers at the end of
the calendar year.
W.P.F. only given on the condition when corporate earns healthy profit
It is some kind of bonus, which is given to every personal according to their basic salary. For
this purpose a committee sits to decide the distribution of it.
This is distributed through bank vouchers.
v. Worker Education Fund:
Pakistan Steel mill has categorized its workers education funds for their children are
according to their position in three different categories;
i.Worker Rs.25/- per Month
ii. From Junior Officer to Director Manager Rs.50/- per Month
iii.Manager and Above Rs.100/- per Month
For Officers W.E.F. is not allowed.
vi. Gratuity Fund:

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Graduated fund means the specific amount of money given to the employee on his retirement.
There are some criteria for distribution of graduate, which is describing as follows;
Gratuity is the sum of the last 5 years basic pays of the officer.
For staffgratuity is count on his last 3 years gross pay. (Gross Pay=Basic Pay + Allowances).
For employees gratuity charge on his 1 year or 6 months last salary withdrawal.
[Note: Gratuity will not given on dismissal of the employee]
In the case of death the loan which is given to employee will be recovered from graduate or
Provisional fund or insurance,if any.
Gratuity is only given to parmenantemployees not for contract and/or daily wages employees.
Function of Gratuity Section:
Tip area work is to check representative's credit or any recuperation remain or not, if any,
then distinguish and apportion tip.
This segment first asks all divisions inside of the steel process that what number of
representatives are working in their area of expertise. In the wake of accepting amount they
will make tip for these representatives for that specific year and solicit that specific sum from
cash from Pakistan Steel plant.
As all representatives won't retail on that year, the remaining measure of cash of tip will be
put resources into banks. For that reason a 5 individuals panel sat for this undertaking in
which 2 are sectaries and 3 are trustees, who will locate the best arrangement to contribute
that specific measure of cash for suitable time period. The trustees must affirm loan costs.
5. Finance Section:

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The finance Section chiefly manages the compensations, recompenses, credits and advances,
full and last settlement of workers at the season of retirement, acquiescence or recording, pay
charge and different conclusions from representatives' pay rates, store of deducted salary
charge in government treasury, and so forth.
The Manager Payroll is heading this area. He is allowed with boundless power over
endorsement of month to month pay rates of the accompanying classes of representatives:
• Permanent Employees (counting staff and officers) • Contract Employees • Daily
Wages Employees • Deputed Employees (presented on Steel Mills from Federal
Government)
Obligations of Payroll Section
The degree and capacities the Payroll Section may be condensed as takes after:
• Payroll handling of Daily Wages Employees: Daily wages workers are named by the
Administration and Personnel (A&P) Department. The Payroll Section gets the subtle
elements of every day compensation workers from particular offices and procedures their pay
rates.
• Payment and Deduction of Loans and Advances: Employees are furnished with
advances and advances against their pay rates. These conceded credits are secured against the
workers' provident and tip asset parities. The Payroll Section gets points of interest of the
advances and advances and starts the installment handle that closures with planning of check

43. Page | 43
with Cash Section. The conceded credits are deducted from the worker regularly scheduled
finance in portions over a characterized recuperation period.
• Payroll Processing of Employees:Payroll handling is finished according to the pay
system/calendar arranged ahead of time. Finance Section goes along the participation
information got from different offices and prepared it with the assistance of the ISM
Department. • Reconciliation of Payroll Subsidiary Ledgers: The ISM Department gives
auxiliary records to the Payroll Section. The finance Section contrasts these records and the
control accounts and accommodates the both.
• Monthly and Annual Income Tax Returns of Employees: Income expense is deducted
at source from the pay rates of workers and saved in government treasury on month to month
premise. Finance Section readies the yearly salary government forms of the workers for
subsmission to duty powers.
• Full and Final Settlement of Dues of Outgoing Employees: Full and last levy of active
workers are figured by the Payroll Section. The positive equalization is paid to the worker
though, the negative parity (if any) is recuperated from the representative or from the
provident.
6. Final Account:
There are also three types of cells used to avail the financial support to any employee or
department of the organization in different conditions.
1) Fixed cell
2) Current cell

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3) Finalization cell
Fixed Cell
There are two type of fixed cell:
a) Moveable: Such as machinery, etc.
b) Immoveable: Such as Building and Land.
Current Cell
It deals with cash that what cash is going out from organization and what is coming in.
For e.g.: - Inventory is a current cell and also deals with the inventory that how many
inventories are remains in the store.
Finalization Cell
Profit and loss are deal there; the balance sheet is prepared here, cash flow Statement, budget,
profit and loss statement, sales and revenue.
VOUCHER
There are three types of vouchers.
1) General Voucher
2) Cash Receipts Voucher (C. R.)
3) Cash Payment Vouchers (C. V.)
Fixed Accounts
There are some types of fixed account
K1 = Land
K2 = Factory and Building
K3 = Non FactoryBuilding
K4 = Plants
K6 = Computers and Hardware
K7 = Vehicles

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7. Store Section:
Store section in accounts department do only recording works of all the stores items. In
Pakistan Steel mill, there are total 7 stores. All stores are allocated according to their concern
department or plant. The purpose of creating stores in P.S. is to provide all necessary
products to concern department on time when they need them without losing of time.
In order to run the store and it up-to-date, there are certain procedure has been followed,
which is describe below.
1. First of all Material Management Department (M.M.D.) check demand of every
department’s demand for their concern products. And then issue annual Material Inventory
(M.I.) of that department’s required quantity and inform this to store department.
2. M.M.D approval goes to purchase department and then they will publish tender for
required material.
3. Central Receiving Bureau (C.R.B.) receive all the material for S.M.
4. After that Material Receiving Voucher (M.R.V.) issued to the qualified tenderer.
5. Then Material Receiving Report (M.R.R.) issued after inspection will be done by P.S.
inspectors to check the specification of the required material.
6. As the M.R.R. given then payment will be made through bill to supplier.
7. As soon as the material arrive into the store C.R.V. send to Concern Store (C.S.) through
M.R.R. in order to allocate its material.
The material has been allocated according to the Racks then Alphabetical Order and in last
according to the Code Numbers.
8. Before issuing material C.S. check M.M.D. of concern department. And there are three
S.R.’s copies issued one for receiving end and one for issuing end and last for recording.

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9. To maintain the required amount of material not in excess or short form, there is an
Internal Verification Cell has been created to check store stock material quantity. And this
check is done two time in a month.
10. Store’s Account Section is responsible for valuing the raw material and spares at the time
of receipt and issuance from the stores.
11. They also update raw material and spares issue, transfer, return and adjustment made by
respective stores. And on the bases of that they make value assessment of parts and material.
12. Store classified raw material and spares as follows;
Stores and spares for ongoing maintains of plant and manufacturing by third parties.
Common user items such as stationery.
Uncommon items.
13. Allotment of change account codes to all user departments for material issues from stores
and allocation of expiry.
14. To allowed meeting of Reserve Price Fixation Committee Tender and Maintained of
related record site.
8. Sales Account Section:
As the Pakistan Steel factory is the biggest steel maker in Pakistan. Along these lines, it deal
its items to wholesalers. Keeping in mind the end goal to deals, the business record kept up
by deals record segment.
To bought steel items from P.S. there must be Traderor Consumer dealership.
1. Broker Dealership: As the merchants are affiliate or they may change over the type of the
P.S. completed item and deal to end-client. For that reason P.S. give them commission or

47. Page | 47
Rebate. P.S. likewise take security saved for dealership to guarantee his protected hand from
any future arrangement issue.
2. Purchaser Dealership: Consumers are end-client of P.S. completed items. They change P.S.
item into their completion item for their own particular utilize, for example, auto fabricates.
On account of lack of item and request originate from both merchant and purchaser, then P.S.
to start with incline toward buyer on the grounds that buyers are entirely rely on upon P.S.
item and P.S. does not give any commission to them.
There are four sorts of records to handle diverse circumstances in P.S. which are given
underneath;
i. Advance Account:Before plotting request from clients, P.S. take advance from
merchant. Furthermore, after request has been given the Delivery Order (D.O.) will be issued
in the Invoice structure.
ii. Cash Account: Deal for money record done by Zonal Sales Office.
iii. Security Account: To bond merchant on their request so they will stay away forever
subsequent to putting request or lift their material on time, P.S. make security represent this.
iv. CreditAccount: For the situation of determined sum by merchant does not satisfied, it
might be short or abundance lifted at some point, to handle with this issue P.S. make credit
account in which the remaining measure of cash may be discounted or balanced in future
arrangements, on merchants' solicitation.

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9. Cost Account Section:
Cost Account means the costing of all expenditure in P.S. They make profit and loss report
on monthly and yearly basis which will given to managers and ministry and for audit.
Process Costing: In which some products are finished goods which are produce to sale while
others are for internal use.
They calculate the cost by adding fixed cost + variable cost + production cost + wastage cost.
For costing, data are coming from different departments such as quantitative data given from
Production Department. And financial data taken from Final Accounts from there profit and
loss account through M.I.S and other are comes from Salary and Sales Section and utilities
consumption given from Monitory Department.
Stores account gives consumption report and other information comes from Production Unit
Department
Miscellaneous quantity comes from production unit given by M.I.S. process.
Depreciation information given by Final Accounts.
Costing on actual consumption bases.
Information from cost account goes to Production, Marketing, and other related departments
and ministry
Job Order costing calculate the value for sales.
Functions:
This section has specific functions to prepare Monthly Operating Results (M.O.R.s) of all
productions complexes and scrap shops.
Job Order Costing system is applied for calculation and valuation of job cards of all C.M.D.
clops and Personal Electric Relationship System (P.E.R.S.).
Preparation of cost sheet of S.M.C. lhr.

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settlement of accounts between K.E.S.C. and P.S. and generalizing sales and purchase of
electricity.
Finished Stock Accounting is one of the core functions of this section which involves
preparation of inventory position on monthly and annually basis reconciliation of finished
goods as well as work improves inventory and maintains of record related stock accounting.
C.M.D.: Two methods of costing
Seven types of shops for maintain.
They receiving Job Card in which Job is written, materials used in it, machinery used in it,
labor used in it is all written. Then they calculate cost of the product.
Seventh shops are;
Electrical
Mechanical
Fabricated
Material
Repaired and Maintained
Every shop send their Job Card on monthly bases.
The basic purpose of cost is to control the cost of the product. They also make Journal
Voucher which is also called Ledger. Final Account give them actual cost after finding
difference in applied cost.
19
At the end, final and management through profit and loss account. Profit/loss account make
two things whether increase in C.O.G.S. or decrease.

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MARKETING DEPARTMENT
INTRODUCTION
Pakistan steel is the only integrated metallurgical complex of the country.
It provide techno economic base for the development and growth of engineering and
construction industry
Established with the collaboration of the former USSR.
Designed capacity of 1.1 million tones per annum with potential up to 3.0 million tones per
annum.
Based on the utilization of high grade imported iron ore and metallurgical grade coking coal.
Commissioned in stages between April - 1981 to august 1985
PRODUCTION UNIT OF PAKISTAN STEEL
UNIT CAPACITY (0000 TPY) DATE OF
COMMISSIONING
Coke Ovens and By-Products 970 April 1981
Iron Making 1230 August 1981
Steel Making 1100 December 1982
Billet Mills 260 October 1982
Hot Strip Mills 790 December 1983
Cold Rolling Mills 200 December 1984
Galvanizing Line 100 August 1985
MAIN PRODUCTS
Coke
Pig Iron/ Hot Meta
Rolled Billets

51. Page | 51
Hot Rolled Sheets/coils
Cold Rolled Sheets/coils
Galvanized Rolled Sheets/coils
ADVERTISING AND SALES SETUP
So as to guarantee smooth stream of Pakistan steel items and to cover instantly and
successfully all exercises identifying with the client, Marketing and deals has been sorted out
absolutely on business lines with zonal deals workplaces at Karachi, Lahore ,Gujranwala and
Islamabad under a concentrated control of Marketing Department of Pakistan steel at Bin
Passim..
ON-LINE COMPUTER SALES
THE zonal deals workplaces composed on current lines utilizing PC offices to advance deals
, give one window operation to the client • Available PC offices have been used to create ON
LINE COMPUTER SYSTEM for the generation and promoting and deals exercises
DOWNSTREAM INDUSTRIES
• Pakistan Steel has been trying limited time endeavors for foundation of downstream
commercial ventures
in the private part in view of usage of its fundamental and by-items.

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• Pakistan Steel has made a completely created mechanical bequest inside of its
outskirts for the advantage of the business people.
• The downstream commercial ventures are fundamentally creating worth included
building products, for example, steel channels (little, medium and huge width) including
consistent funnels wire bar and safeguarding circles, light and substantial vehicles little areas,
fortification bars, slag bond, slag fleece, car parts and so forth.
FINANCE DEPARTMENT
Tender
Bidders are invited to submit quotations on C&F/FOR Bin Qasim, Karachi basis (For only
local manufacturers for the products produced by them). In Case of FOR , the tender
documents will only be issued to the interested parties who are registered with Sales Tax
Department and will be required to submit photo stat copies of Sales Tax Registration
Certificate at the time of purchasing tender documents.
Budgeting
Financial plan is arranged every year covering the period from first July to 30th June. The
monetary allowance activity is begun well before the begin of budgetary year. All the
generation and administration divisions are encouraged to present their appraisals with full
legitimization.
The procedure of spending plan making is clarified as under
a) Production arrangement showing the creation of different steel items amid the year is
shown by the Production arranging and Control Department (PP&C). In view of the

53. Page | 53
generation arrange, The provisional delivery plan for import of mass crude materials i.e.
coking coal, iron mineral and manganese metal and so on.; is readied by PPC in counsel with
the delivery division.
b) ii) Sales arrangement demonstrating amounts, value and esteem is put together by the
promoting division for evaluating the business esteem.
c) iii) The amounts of crude materials required for accomplishing the generation
arrangement are computed considering the utilization standards showed by the originator of
the plant and in addition the past experience.
d) iv) Pakistan steel has closed long haul concurrences with outside suppliers (for a time
of 5 years) for supply of mass inputs i.e. coking coal, iron mineral manganese metal and so
on . The costs of proposals inputs are investigated every year powerful first April. So also,
contracts for transportation of these inputs are finished up with delivery organizations every
year. The materials expense is worked out on the premise of contracted rates of crude
materials and its transportation.
e) v) The utilization of utilities i.e. common gas, power, water, POL and so forth is
resolved keeping in perspective the level of generation/accessible flow standards of
utilization. The utilities are esteemed at winning costs in addition to expected future
increment in rates.

54. Page | 54
f) vi) Personnel related expense, repair and upkeep, deterioration; overheads and so on.;
are evaluated on the premise of real/past experience and foreseen future increments in such
costs.
g) vii) Based on the above information, the financial backing is gathered and the
anticipated benefit and misfortune and income explanations are readied.
h) The spending plan so incorporated is submitted to the steel factories administration
for audit. After leeway of the monetary allowance by the administration, the same is
submitted to back council of the board for thought and endorsement in the first example.
From there on, it is at long last submitted to the governing body for their thought and
endorsement.
i) The financial backing affirmed by the top managerial staff is circled to all the
concerned divisions with the counsel to entirely stick to the planned procurements.
Financial Scrutiny
1. Initiation of case by the respective department e.g. Billet Mill
2. Noting of fund through Finance.
3. Preparation of indent by MMD.
4. Approval of indent by competent authority
5. Tendering by purchase department
6. Technical evaluation by the respective committee.
7. RRC (if required)
8. Preparation of Purchase Proposal by the Purchase Department.

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9. Processing of the case for financial concurrence by the Finance department.
10. Issuance of PO by the purchase department.
11. Billing.
12. Cash payment.
Closeout
Measure of Official Auction of the thing proclaimed for the design is gathered through the
Bank Account with ABL in control of Store Department. The sum gathered by the Bank in
this association is exchanged to Pakistan Steel Account according to exhortation from Stores
Department by method for letter to the bank duplicate of the same is embraced to Cash
Section. On receipt of the letter, bank exchange the add up to the Main Account of Pakistan
Steel and issue Credit Advice. Credit vouchers are gone for joining in Books of Accounts.
Installments
i) Employees - Payment vouchers got from Pay Roll, Bills, Advances, Final Accounts, and
Sales Accounts are entered in important Register.
Checks are readied marked joint by the marks.
Checks are gathered by the payees on their recognizable proof.
Power for endorsement of P.A.C.V.

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ii) Check marked by approved authorities. Installments Petty Cash a measure of Rs.50, 000/ -
is kept in Petty Cash, CRV/CVs are raised and marked by Sectional Head check is marked by
the approved officers.
iii) CRV/CV/Checks marked by approved officer physically money is coordinated with day
by day Cash Book Computer Based. Soviet Expert Salaries Note to the impact is gotten from
Finance Department, Voucher is readied with Cash Section, voucher on the premise of note
from Finance Department, is marked by Sectional Head, Check is arranged and marked by
Authorized signatories.
iv) CV sum according to Finance Note. Corporate Secretariat installment Note is moved by
Corporate Secretariat with respect to documenting charge for, designation of Directors of
Board of Directors, installment identifying with Security Exchange Commission of Pakistan.
A voucher is readied in the light of the Note. Money is sent to Corporate Secretariat for
saving the sum for the reason.
v) CV sum limit Rs.20, 000/ - marked by Sectional Head Amount of note and store challan is
coordinated. Discount of Security Deposit Request through Purchase, ECD, BMD.
INFORMATION SYSTEM AND MANAGEMENT DEPARTMENT
ISMD offer two systems to marketing department to operate its data, and these system are;
1. DB2 (Data Base-2)
2. Flat File System (VSAM)
PC System Bureau:

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1. Quality Policy: At CSB our arrangement is to give our client great administration with
100% on time conveyance and ever in developing level of fulfillment through our proactive
and element group of IT. CSB is committed to continualimprovement.
Inside Working System:
Reason: It is to characterize quality arrangement and orderly exercises completed at diverse
segments of CSB for giving information handling administrations to different offices.
General Activities:
At CSB, to perform all exercises in productive route, there work is led in two movements
which handle seven segments. And all there enacts are given as takes after;
1. Application Development:
• System investigation, and investigator software engineer
• Developing new framework
• Maintenance of operational framework

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2. Framework Operation/D.B.Admin:
• Responsible for smooth working of centralized server and database
• Installing equipment and designing c. Issue taking care of and inconvenience shooting
3. System Admin:
• Installing terminals
• Monitoring system execution
• Complaint taking care of
4. PC/Logistics:
• Personal Computer
• Printer and scanner
5. Information Control:
• Smooth stream of Input and Output
• MIS report created

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6. Information Entry:
• Proper and auspicious key punching with space and exactness.
7. Administrator:
• Attendance and non-attendant report and leave records of CSB workers.
• Computer upkeep charge bills
• Annual department budgeting and inventory.
SERVICES PSM OFFER
Engineering Design Services
Electronics Services
Electrical Services
Mechanical Services
Metallurgical Services
Engineering Testing Services
Electrical Testing & Calibration
Other Services
Guest House
Pakistan Steel Hospital

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SWOT
ANALYSIS OF
PSM

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SWOT ANALYSIS OF PSM
STRENGHTS
 Monopoly:
Steel factory is the main incorporated steel plants in the nation though India has six
governments claimed steel factories in addition to the monstrous TATA steel and iron works.
These seven contribute as much as 16.1 million tons for every year of the 28 million tons.
The opposition in Pakistan is constrained to just little factories and foundries, for example,
the scandalous:
– Ittefaq Foundries
– Peoples steel factories
These factories are scattered the whole way across the nation and they contribute a practically
equivalent measure of steel items in the nation as of steel plants which is equivalent to 1
miilion tons for every year.
 Prepared Human Resource:
Throughout the years steel plant has been the center of movement in the metallurgical
segment of the nation. More than 10,000 specialized work force have been prepared at the
Steel processes to such an extent that a few individuals in the administration have procured a
misfortune making factory in the Central Asia republic and have transformed it into a benefit
making venture. These persons and the individuals who are currently performing their
employments at the plants at the PSM is presently an exceedingly prepared pool of laborers
whose administrations can be used at the change of the building part of the nation.

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 Accessible Infrastructure:
The plant format was planned by arrangements that within the following five years it will be
moved up to 1.3 then to 1.5 million tons creation for each annum. Everything including the
plant powerhouse the impact heaters were intended to suit the third impact heater of 1750
tons for each day limit. These units were never introduced despite the fact that an entire
configuration department is working in the PSM. The human asset has additionally been
prepared and the Metallurgical preparing division is likewise working with a specific end
goal to satisfy the human asset necessity.
 Closeness to the Port:
Situated at a separation of 40 km South East of Karachi at Bin Qasim in close region of Port
Muhammad Bin Qasim is a waterfront site, which lies on the National Highway, is connected
to the railroad system. PSM is spread over a territory of 18,600 sections of land (around 29
square miles) including 10,390 sections of land for the principle plant. Its emptying and
transport framework at Port Qasim is the third biggest on the planet and its modern water
supply with a limit of 110 million gallons for each day is the biggest solid repository in Asia.
A 2.5 kilometers in length seawater channel unites the plant site to nourish the ocean water
dissemination framework with 216 million gallons for every day.
The area gives a high point of interest as to the main part of crude material is sent directly
into the stores of the PSM through a transport line from the boats which stay on Port Qasim.
 Conveyance Network:
Pakistan steel has a settled purchaser system, which diminishes the business exertion with
respect to the association all in all. The system comprises of merchants who exchange
specifically to the business sector subsequent to acquiring from PSM. This does not require

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PSM to keep up direct contact with its littler purchasers. Bigger industrialists and merchants
are managed specifically since requests are of more esteem and are as per standard
determinations and quality necessities.
Weaknesses:
 Imported Raw Material:
The obligations demanded on imports are variable. The GOP used to force the necessity of a
NOC affirmed by the PSM before imports were permitted to enter the nation yet such is not
the case any longer. Notwithstanding this PSM needs to depend on imports because of the
non-accessibility of real inputs, for example, coal and iron mineral. The GOP has however
enhanced the circumstance by lessening the levy rate from 65% to 35% that has extensively
influenced the assembling expense.
 Overstaffing:
The quantity of laborers at present represents an issue since they are not in lieu with the limit
use of the plant. Overstaffing means countless are a piece of the workforce notwithstanding
when there is no requirement for them. Rather than eliminating the plant laborers the thought
ought to be to decrease the regulatory staff which is as bunches of secretaries and colleagues
for the higher authorities. 78 secretaries make up the workforce in only 9 directorates.
Likewise the thought being learned at present is to outsource security to cut staff cost here.
Disposing of the prepared shop floor specialists, architects and experts is not a practical
choice.

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 Bureaucratic administration:
PSM is likely the main plant on the planet where none of the CEO's has ever been a designer
or even a worker advanced from inside. The greater part of the CEO's had been named by the
Ministry of Production and henceforth their just intention was either to fulfill those in the
high positions.
Then again the level of government backing similarly as crude material imports are
concerned is not considerable. Additionally the GOP takes no strong activities to take out the
issue of dumping as has been done in Iran and India.
 Vegetation:
PSM is endless supply of the most generally utilized steel making innovations as a part of the
world. The impact heater, which is the heart of an incorporated steel plant, has an operational
existence of 30 years. This and other related hardware at PSM is in desperate need of
substitution and BMR sooner rather than later. PSM does not have the funds expected to lead
the required measure of capital repairs, which are long late. The assessed expense of these
repairs is around Rs. 2 billion. PSM is at present expecting a misfortune worth 75% of the
evaluated expense and the required capital repairs will must be financed through outside
means which will add to the obligation load.
OPPORTUNITIES:
 Short supply of steel
PSM is working in a domain where the interest for steel is developing at a rate of 7% for each
annum and is anticipated to associate with 7-8 million tons by 2005. The national necessities
of steel in a matter of seconds are around 4 million tons. Nearby producers including PSM

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and others can satisfy just 50-60% of this interest. Whatever is left of the interest is taken into
account by means of the sneaking diverts uncontrolled in this industry.
Pakistan imports steel worth Rs.2 billion and the rest is carried through the Afghan tranmsit
exchange and the permeable Iranian outskirt.
 Downstream Industries:
Over the long haul the foundation of downstream tasks in genuine sincere will have a really
boosting impact on Pakistan agribusiness and in addition modern economy. It will bring
about the advancement of high esteem included innovative commercial ventures and met the
developing needs of designing merchandise. This afterward would realize in the fast
increment in the utilization of steel. For PSM this implies a normal increment in existing limit
and section into advanced machine making stage and enhanced quality, proficiency and
efficiency. 32 of such commercial ventures are as of now in operation though another 8-10
are presently finishing.
 Extension:
The execution of the extension arrangement will prompt the use of the overabundance
workforce and help PSM decrease working expenses because of economies of scale.
Extension up to 3 mtpy will likewise help PSM catch a bigger piece of the pie and in this way
enhance its income status also. A nitty gritty exchange of this arrangement has been done in
the past area on the open doors.
THREATS:
1. increasing costs

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2. tax changes
3. technological problems
4. Negative cash flow

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PEST Analysis of
Steel Mills

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PEST Analysis of Steel Mills
Political:
There is a lot of political interference in the management decisions of the organization.There
are no quantitative confinements on import of iron and steel things. The main instrument
managing the imports is the levy system .Advance Licensing Scheme permits obligation free
import of crude materials for fares. Iron and Steel industry has been incorporated into the
rundown of `high need' commercial enterprises for programmed endorsement for remote
value venture up to 100%. Cost and appropriation of steel were deregulated from January
1992.
Economic:
Steel industry may got influenced due to the patterned monetary condition on the grounds
that numerous commercial ventures like cars, apparatuses and development relies on upon the
steel business and if commercial enterprises confronts any sort of downturn in the economy
Pakistan steel might likewise confront the misfortunes . Steel generation procedure are totally
subject to the vitality market which can influence the production.
Socio-Culture:
Pakistan Steel has engaged in many social activities as well. They continually made the
enhancements in the wellbeing issues, financial wellbeing and training given to the
employees.

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Technological:
In technological advancements, Pakistan steel mills is not up to date due to lack of financial
support and proper funding. Moreover, PSM is unable to earn profit since 2008 which is not
allowing the organization to think ut of the box and adopt some technologies for the ease and
betterment.

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IMPORTS OF
PSM:

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IMPORTS OF PSM:
KARACHI, March 20: Pakistan imported 3.2 million tons of iron and steel in FY14
amounting about $2 billion, which was 5 per cent of the annual import bill.
This was unveiled in the SBP's second quarterly report for 2013-14 which talked about in
subtle element the terrible state of Pakistan Steel and request of iron and steel in the nation.
The completed steel imports are cost aggressive in spite of high import obligations (from 10
to 35 for every penny), 16 for each penny deals assessment, and 3 for each penny withholding
expense, the report said.
"This is upsetting given Pakistan's 1.4 billion tons unexploited demonstrated iron mineral
stores and in addition adequate local limit (about 4.5 million tons). With full limit use,
imports of completed products can drop to as low as 0.1 million tons a year," the report said.
In dollar terms, the net sparing could surpass $1 billion every year. Various elements are in
charge of the current situation including the weak Pakistan Steel Mills, lacking venture and
provisos in the expense framework, the report noted.
More than 96 for every penny of development in world steel creation amid the most recent
decade was contributed by Asia, with China and India for all intents and purposes clarifying
the whole extension.
In sharp complexity, Pakistan's rough steel creation declined from 1.1 million tons in FY13 to
0.4 million tons in FY14.

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As local utilization keeps on developing, the interest supply crevice is broadening. A
preservationist assessment puts interest for completed iron and steel items as more than 6
million tons/annum.
Pakistan Steel Mills is the sole processor of iron metal in Pakistan and constitutes somewhat
less than 20 for each penny of the nation's ability for completed steel.
In better times, the factories supplied crude material (billets and HR sheets) to the private part
also.
"Since FY09 (when PSM reported a colossal misfortune), rough steel generation has been
going downhill, dropping from 80 for each penny of introduced limit in FY08 to just 23.8 for
every penny in Jul-Nov FY13," said the report.
PSM has subsequent to been strapped for liquidity, not able to reliably finance crude material
imports. Low unrefined generation has influenced creation of completed steel by the PSM
and the various downstream private factories depending on PSM, which now need to import
crude material.
"To date, PSM has been not able develop out of the low supports low limit cycle," the report
noted.
In any case, all the more essentially, the present neighborhood iron mineral supply is
adequate to deliver just 0.2 million tons steel a year. This implies at full limit, PSM must

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import no less than 1.5 million tons of iron metal, which adds up to import weight of around
$0.2 billion every year.
The PSM additionally imports coal for coking. Coking needs predominant quality coal and is
consequently this segment is not substitutable locally. At full limit, the PSM requires 0.85
million tons of coal for every year ($ 0.1 billion at FY11 costs).
"To put it plainly, with a specific end goal to equal the initial investment, PSM must have
adequate assets to have the capacity to keep running at proficient limit. Something else,
delivering at low limit will just prompt snowballing misfortunes," said the report.

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FINANCIAL
ANALYSIS OF
PSM

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FINANCIAL ANALYSIS
PSM is gone up against with a profound monetary emergency acquired from earlier years'
build-up of collected liabilities. The factory since its initiation was running in misfortunes.
Amid 1988-89 the enterprise earned benefit interestingly. Yet, began managing misfortunes
again from the following year 1989-90 attributable to under usage of creation limit at 62%.
The purposes behind starting misfortunes were ascribed to Substantial capital venture.
 Unnecessary labor of more than 23,000 representatives rather than real necessities of
12,000 to 15,000 workforce.
 Peace issues.
 Poor value proportions in view of costly obligation of Rs 8 billion.
This change enhanced the proficiency and gainfulness of the factory impressively. The
enterprise has possessed the capacity to pay off its running funds and quick current liabilities
of Rs.2.27 billion amid 1992-93.While intemperate labor was wanted to be caught up with
fruition of development of the current plants.
NET EQUITY
The Corporation's net value has been dissolving in the course of recent years. The primary
purpose behind this unfavorable pattern is the span of monetary charges brought about every
year. Indeed for the year finished June '09 monetary charges (Rs. 2,028.349 million) are
significantly higher than the gross benefit earned (Rs. 1,816.875) on net deals.
An examination of key money related figures of the Corporation for as long as six years
demonstrates that PSM is an exceptionally equipped (a relationship in the middle of
obligation and value) association and in light of the high adapting and low capitalization,

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monetary charges alone every year for all intents and purposes counterbalance the
Corporation's benefit.
OBLIGATION SITUATION
PSM owes Rs.13.717 billion as foremost sum in admiration of Participation Term Certificates
(PTC's) and Medium term Loan (MTL's) and Rs.7.767 billion being premium and
correctional enthusiasm for appreciation of PTC's to the banks as at June 30, 2009. PSM has
not paid second, third and fourth portions of the PTC's of Rs.700 million each due on July 30
'08, '07 and '06 separately. The Economic Coordination Committee (ECC) framed for PSM's
money related rebuilding is taking care of this issue.
The major monetary liabilities of PSM separated from the above are Rs 1.5 billion due
because of chunk and pig iron imports. Port Qasim claims on PSM add up to Rs.70 crore and
other collected liabilities to sundry banks have heaped up to Rs.50 crore. The PSM in this
manner has money related liabilities of over Rs.21 billion.
Liabilities
 2009= RS 4795799
 2008 = RS 4116970
 2007= RS 4051335
As appeared by the accompanying chart the proportion of the present and costly liabilities is
expanding in the aggregate liabilities. This sounds a twofold caution for the PSM factory as
these transient credits are costly as well as must be returned sooner rather than later therefore
representing an extreme money mash on the as of now destitute association.

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FINANCIAL COST
Money related Charges would come to in the region of Rs.2.5 billion generally. The
Corporation has caused generous misfortunes in gross edges because of successive stoppages
of generation at different plants furthermore because of merchandise being delivered that are
not of details that are sought after. The increment in gross deals in 2007-08 was because of
the impetuses given to clients as free credit office, marking down of LCs and commission
paid to each client consistently. Besides the Government forced limitations on imports. The
main increment in net deals is for 2006 and this is on the grounds that no rebates were
permitted that year. The markdown demonstrated is against conveyance requests issued a
year ago. For alternate years the change was primarily because of government arrangements
and poor limit use because of absence of plant upkeep.
HIGH PERSONNEL COST
As of now PSM is rising so as to confront extreme money related crunch brought about
expense and falling deals cost because of out of line rivalry from business imports and 12000
abundance staff trouble. The irregularity has brought about higher unit cost, which makes
PSM unviable. The faculty related expense is around 25% of unit expense against world
normal of 15% due to the 12000 overabundance workforce. The abatement in Administrative
expenses in 1998 and 1997 were because of the distinctive monetary measures taken by PS as
far as cutbacks and lessened extra time and reward. The 12.47mn increment in 1999 is
because of the increment in contract work in addition to therapeutic and procurement for tip
made for the current year.
The accompanying table shows how increment in limit by means of the idea of economies of
scale will help in diminishing the general labor cost. Consequently, keeping in mind the end

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goal to stay aggressive and alluring according to the financial specialist limit development is
an absolute necessity.
DECLINING SALES
The decrease in Gross Sales was due to decrease in customs duty of finished goods and
increase in raw material which lead to a decrease in prices of imported products and as a
result competition for PSM increased resulting in low sales. Plus the deteriorating state of the
plant was also a major factor.
This trend has other reasons as well since there is now no need of a license requirement to
import steel and other related goods any body can import steel. A second illegal source of
substitute products is the porous afghan border as the steel lying in the warehouses of former
soviet states is finding its way into the market.
MAJOR FINANCIAL DISPUTES AND BAD DEBTS
For long haul credits and advances 0.337mn advance is receivable from an executive since
1996 and a development was paid to Messrs. Banbhore Industries for supply of merchandise
without a buy request (increment of 2.35%). In transient funds the significant increment in
1997 is because of 1,121.5mn remarkable against Finance against narrative bill. For Deposits
and different receivables a measure of Rs.22.7 mn is receivable from Arabian Sea Country
Club (area rent). The postponement in the capitalization of capital work in advancement is
because of the unadjusted bills of the contractual workers. PS has interest in 9 organizations
at confront of Rs.27.9 million. In indebted individuals a measure of Rs.49.89 million is
receivable from People's Steel Mills on which there is a debate. The company's issues are
disturbed by a lasting liquidity crunch. As the Corporation is destitute it has nor possessed the

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capacity to do significant obligatory repairs nor enhance the generation proficiency of the
current offices. In the current situation with money related strength of the enterprise,
significant modernization or extension of the generation ability to convey it to an ideal
monetary level can't be accomplished.
The budgetary rebuilding of PSM is long past due. Prior to a few recommendations were
produced by PSM yet they couldn't be executed for need of the Government endorsement.
RESCHEDULING OF BANK LOANS
Under a concurrence with syndicate banks a measure of Rs.11050 million was changed over
into PTC's. The PTC's holders are qualified for take an interest in the benefit of PSM at the
base rate of 11% for every annum. It likewise gives that if there should arise an occurrence of
misfortune or in-adequacy of benefits in any money related year, the Government of Pakistan
is required to make great the entire or somewhere in the vicinity a significant part of the
shortage as there 'is against the 11 % premium.
A measure of Rs.5752 million has fallen due on PSM by virtue of credit portions/return on
PTC's (advantage installments). The above duty couldn't be paid by PSM to the banks
because of misfortunes supported. The Government of Pakistan has likewise not paid the'
levy as underwriter and nor has it made procurement in the financial backing according to
assention. This is in spite of the way that immense misfortunes were acquired as an
aftereffect of which PSM amid Mr.Usman Farooqi's residency was not able pay portions
taking after due or benefit the hobby due's. Three letters composed by him and his Director
(Finance) were tended to Finance Ministry. This is sufficiently proof that he was not making

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benefits as guaranteed by him in the press. In like manner, if all else fails it has been
concurred in the middle of PSM and the Banks to reschedule the PTC's by conceding seven
years ban on the terms and conditions demonstrated by the business banks.
The PSM has now worked out a course of action with the banks to pay off its gathered
obligations and medium term advances. Under the said course of action the PTC's of over
Rs.14 billion and Rs.3.4 billion will be changed over into government ensured bonds with 15
years' development period powerful with a ban period.
WORKING CAPITAL REQUIREMENT
The capital repairs and maintenance of the plant remained a neglected area and is being
currently operated at the risk of a sudden breakdown. PSM immediately needs about
Rs.3.0billion for necessary repairs/maintenance. PSM maybe assisted in arranging a loan of
Rs.3.0 billion from NCB’s in order to under-take essential BMR/ repairs & maintenance’
works.

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PERFORMANCE
REVIEW OF PSM

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PERFORMANCE REVIEW
PSM has followed a unpredictable pattern of performance during the 15years of its operation.
It passed through difficult period from 1985-1991 when production and sales were low and
cost of production was high. As a consequence thereof, PSM suffered losses. Production,
sales, profitability, and liquidity position improve during the years 1992-95. PSM however
suffered heavily under the previous management in the year 1996 due to mismanagement
particularly in the procurement and marketing sectors. It resulted in a liquidity crunch,
substantial increase in outstanding liabilities, pile-up of inventory and heavy losses. Briefly
the performance of PSM since 2003-04 has been as under: –
Production
The production has shown downward trend due to:
 Non-availability of raw material
 Large carry-over inventories of finished goods
 Low sales turn-over during the period
 Overdue capital repair which could not be carried out due to cash-flow problems.
The production target for the year 2000 is 1 million tonnes, i.e. nearly 91% capacity
utilization. On attaining the full cycle of production the quantities of the products that can be
manufactured are as follows:
The sales showed a marked decline, which is attributable, to unfavorable tariff and import
policy as described below: –
Fixation of low Import trade price ITP for imported secondary steel products on quarterly
basis not only damaging PSM as it had to lower its prices to remaining the market but having
adverse impact on the revenue collection and balance of trade of the country.
Reduction in import duty on shredded bundled waste/scrap other waste & scrap and vessels &
other floating structures for breaking-up.

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Allowing import of “re-rollable scrap” by excluding it from the “negative list”.
Smuggling of iron & steel products are taking place unabated through northern borders at
dumping prices hurting established steel industry in the organized sector.
Inspite of above-mentioned problems PSM was able to achieve the highest ever sales of
Rs.15.4 billioN.
Market Demand
The demand of steel products is constantly increasing. M/s. W.S. Atkins International, U.K.
who were engaged by Ministry of Production under the sponsorship of the World Bank to
carry out a study on “The Steel Sector in Pakistan” have indicated the demand of iron & steel
products in the country at 30.70 million tonnes . Extrapolating the projections at Atkins
growth rate assumed at 7% per annum, the total demand size of iron & steel products works
out to 4.86 million tonnes by the year 1999-2000 and 7.35 million tonnes by the year 2008 –
2009.
PSM is presently meeting the domestic demand of about 25% demand of long products and
60% of flat Products.
Customers
The main customers of PSM include traders and industrialists. A dealer network for sales is
present which aids in the distribution and marketing of the organization’s products.
Industrialists include large pipe makers, storage tank and pipeline sheets manufacturers.
Small consumers buy from the dealers whereas large buy directly from PSM. The latter do so
since their orders are large and must be in accordance with specific standards and
specifications. They require specific grades (prime, secondary A etc.)
Suppliers

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The main suppliers of raw materials are Australia, India, Mauritania. Coal is imported from
Australia and Canada in the ratio 80% and 20% respectively. Magnese ore is mainly imported
from India. Pakistan imports around 1.6 million tonnes of iron ore each year. Around Rs.100-
150 crore is spent annually just on the imports of spares and alloys. The existence of an
import lobby has led to an increase in bank charges from 0.5% to 5% which adds to the cost
burden for PSM.
The process of purchase involves long-term contractual relationships between mining
companies and PSM. Most of these contracts are for a 5-year period.

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ORGANZATIONAL
HEALTH AND
SAFETY IN PSM: