Mughal Steel completes CPEC-triggered expansion plan

By Khalid Aziz | Gwadar Pro Aug 27, 2021

ISLAMABAD, August 27 (Gwadar pro)- Pakistan’s prominent steel producer, Mughal Iron and Steel Industries Ltd., on Thursday announced to have completed Balancing, Modernisation, and Replacement (BMR) of its girder re-rolling mills.

The development marked the completion of the company’s ambitious expansion plan initiated in 2017 to enhance re-rolling capacity up to one million metric tonnes per year.

The company said that the majority of its sales outside of the country were to Chinese customers.

On May 19, 2017, the company announced that it had agreed with an Italian firm for BMR of its re-rolling mills to maintain its 'strategic position given the sharp increase in demand due to infrastructure projects under  China-Pakistan Economic Corridor (CPEC).

The firm had already announced the completion of the BMR of its bar re-rolling mills on June 1, 2021.

In April 2021, the company approved increasing its authorised capital from Rs3 billion to Rs5 billion. The same month, it also raised Rs2.74 billion by issuing 16% shares, which is utilised in paying back liabilities incurred on BMR of its bar re-rolling mills.

The company registered a 40% increase in sales revenue in 9 months of the fiscal year 2020-21 as compared to the corresponding period of the last year. In its financial report, the firm cited a remarkable jump in sales due to CPEC projects and anticipated even further demand in the future. During the period, the company’s gross profit shot up 141% to Rs4.8 billion from Rs1.98 billion in 9 months of the previous fiscal year. The firm has not issued full-year financial results yet.

Under the expansion plan, the company is also upgrading its in-house electricity production capacity to 27.9 megawatts from the existing 9.3 megawatts to ensure uninterrupted power supply. In this connection, the firm has issued Rs6 billion guarantee for its subsidiary, Mughal Energy Ltd.

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