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China-Pakistan JV steel manufacturer set to restart production

By Khalid Aziz | Gwadar Pro Feb 11, 2022

ISLAMABAD (Feb. 11): Alhaj Asia Star Steel Co. is prepared to resume production after overcoming initial difficulties, Zubair Khan, deputy chairman of the firm, told Gwadar Pro.

Alhaj Steel is the largest private-sector joint venture in steel industry between HEBEI Xingang Iron & Steel Group of China and Alhaj Group of Pakistan. The JV has set up a high-quality 60-grade steel manufacturing unit at Gadoon Industrial Estate in Swabi district of KP province with installed capacity of 1,500 tons per day, or 0.5 million tons per year.

Alhaj Steel started commercial operations in late 2020 and suspended production after a few months in early 2021. “We faced hurdles due to specific dynamics of Pakistani market and the economic uncertainty triggered by Covid-19 pandemic, which forced us to shut the plant. However, we are all set now with a renewed marketing strategy and our Chinese partner is determined to resume production soon”, Zubair Khan said.

The JV aims to enhance the capacity up to 2 million tons per annum in the second phase to become the largest steel manufacturer in Pakistan after state-run Pakistan Steel Mills in Karachi, which is presently non-operational.

The firm is the second largest private sector steel manufacturer with the present capacity after Aisha Steel Mills, which has an installed capacity of 0.7 million tons per annum. Aisha Steel was established in 2012 as JV between Pakistan’s Arif Habib Ltd. and two Japanese firms. However, Arif Habib later acquired the majority of shares.

Alhaj Steel has employed over 500 Pakistani and Chinese workers, and is regarded as a big boost for Gadoon Industrial Estate.

A senior official of the Gadoon Estate said on condition of anonymity that Alhaj Steel had to cease operations due to volatility in PKR values. However, he said while citing his conversation with the management of Alhaj Steel that the firm had finalised their arrangements for restarting steel production including procurement of raw material and calling back the staff to work.

Zubair Khan said that the Gadoon Industrial Estate could attract more Chinese investors if linked with the M-1 Motorway and the Swat Expressway. The KP government has started paperwork on the M-1 link project, which will further boost the zone, he said. The zone is spread over an area of 1,116 acres, having all necessary facilities for industrialisation, according to KP Economic Zones Development and Management Co.

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