Looking into the future, the Mughal Steel see not even the slightest room for easing our efforts as we still have a long journey ahead and important tasks on our shoulder. Our aim is to improve the quality of life of the communities we serve. We have unyieldingly strived towards this goal and address the severe market challenges and stayed ahead in the domestic industry by focusing on the areas such as improvement of industrial layout, adjustment of product mix, optimization of cost performance, technological innovation and overall competitiveness. The Company has initiated its strategic transformation from energy producer-up/down stream industry to import substitutions and from using local ingredients to mining. Nothing could stand in the growth path of MISIL, accrediting committed, forward looking, and ever challenging human resource.
Steel Sector is constantly expanding, with the current demand exceeding the available production. Demand for steel products is expected to rise further in near future due to inauguration of mega development schemes and power projects under the China-Pakistan Economic Corridor (CPEC) which is expected to boost the annual demand for steel products considerably. It is expected that in the early stages of economic development, steel consumption is expected to increase at a faster rate because huge quantities of steel are required to build basic infrastructure, including bridges, dams, railways, and power generation, distribution and transmission projects, etc. Further, since its launch, “Mughal Supreme” has also received considerable positive response with demand increasing steadily with time. The product has already established its footprints in the retail market as an accepted and trusted brand and is expected to penetrate further into consumer preferences due to its quality and reliability creating further demand. As a result, it is expected that the annual demand for our steel rebar collectively in both corporate and retail sectors would increase from existing 120,000 MT to 325,000 MT within the next few years which cannot be met with existing installed capacity, with the major chunk of increase in demand being expected to arise within the upcoming year. Therefore, in line with its growth strategy and in view of meeting the expected increase in demand for rebar, the management has decided to conduct BMR of its existing dedicated rebar mill. This will result in improved efficiency of the re-rolling process along with increase in production capacity of steel rebar from existing 150,000 MT to 420,000 MT. Currently, rebar was being manufactured from mix of imported and self-manufactured billet. Due to the increase in price of imported billet and imposition of 15% regulatory duty, the cost of imported billet had increased significantly as compared to cost of self- manufactured billet. Therefore, the existing raw material mix was no longer viable and hence the burden had to be shifted towards self-manufactured billet. However, self-manufacturing of billet is a highly energy extensive process, with the existing available energy not sufficient enough to meet the existing as well as increased billet manufacturing requirement. Subsequent to increase in capacity of rebar, this requirement for billet is expected to increase significantly in the upcoming years. Therefore, in view of above, the current power generation capacity of existing 9.3 MW gas captive power plant is being enhanced by adding six (6) additional engines of 3.1 MW each. The said enhancement is expected to play a fundamental role in meeting increased demand of billet to support the existing re-rolling activities. Further, the associated gas load has already been extended to 2.8 MMCFD from 1.8 MMCFD. The overall cost of the above projects is estimated to be Rs. 1,750.000 million. Out of total project cost, Rs. 1,257.998 million is being financed by way of equity with the remaining cost along with any escalation to be financed through internal resources The above expansion projects are expected to play a significant role in further increasing the turnover and improving the margins of the Company. The expansion will result in increase in overall re-rolling installed capacity from 688,000 MT to 958,000 MT making it one step closer to reaching the 1 million MT installed re-rolling capacity milestone. Going forward, the growth and profitability of the Company will remain dependent upon a number of external factors such as economic development, political stability, consistent economic policies with improved law and order situation of the country.
The key aspiration for the management in the years to come will not only be to maintain the current performance standards but to add more feathers to the consistent track record of the Company as well.
Efficiency and cost reduction efforts will continue to be the main focus in all operational areas and the Company will continue to adopt various strategies to reduce cost including use of alternative fuels and optimized operations of the plant.
Lastly, the Board remains committed in providing sustained returns to our shareholders, in addition to maintaining our reputation for good governance.