Prime Minister Raja Pervez Ashraf on Saturday urged foreign and local investors to invest in steel sector as currently the steel consumption in Pakistan per capita stood at 37 kgs, which is among the lowest as compared to regional average of 208 kgs and world average of 181 kgs. “We have relied heavily on import of steel iron to meet growing local demands which is likely to increase at an average of 5 percent in line with global trends,” he added.
The prime minister said this while addressing an inaugural function organised by the management of Tuwairqi Steel Mills Limited at the ground of the Mills. The Prime Minister inaugurated “Pakistan”s first Direct Reduction Iron (DRI) plant of MIDREX process at Tuwairqi Steel Mills.
Raja said the inauguration of this plant heralds a new phase in the industrial development of the country. It also reflects the growing confidence of the international investors in the business friendly policies of the government and the vast potential that Pakistan offers, he added.
He said this project represents a successful model of marriage between investment and technology aimed at benefiting from the potential of the Pakistani markets. This model can be emulated by others too, he added. “By successfully completing the project, Tuwairqi Steel Mills Limited has demonstrated that investment, process, infrastructure and the cost of doing business in Pakistan are favourable,” he said.
Raja said ”steel builds the nation” was the vision of Shaheed Zulfikar Ali Bhutto. He was cognisant that indigenization and development of local industry was not possible unless Pakistan produced steel locally. Consequently, Pakistan Steel Mills emerged as the first integrated steel complex of Pakistan in 1970s, which laid the foundation for fast-track economic and industrial development in the country, he added.
He said the government has recently signed a Memorandum of Understanding with Russian Federation for expansion of Pakistan Steel Mills to cater to ever-growing demand for iron and steel in the country. The Prime Minister said that Pohang Iron and Steel Company (POSCO), a South Korean-based company and the third largest world steel maker by market value has partnered with Tuwairqi Steel Mills Limited in order to set up this plant in Pakistan.
“I understand that they are also working together to explore the possibility of exploration of iron ore in the country. I am encouraged by the fact that they have shown interest in making investment in the power sector, the ship building industry and a 500MW hydel power generation project in Khyber Pakhtunkhawa,” he said. The Prime Minister highlighted the salient features of the investment policy of the government which he said envisages equal treatment to local and foreign investors, 100 percent shareholding and repatriation of profits.
“My government would like to assure the business community and investors that they would find the government forthcoming in encouraging, protecting and supporting their investments.” “I would urge the investors to benefit from the Export Processing Zones set up by the government, which offer exclusive incentives to investors including development of land on highly competitive rates for 30 years” lease, which is extendable,” he said.
He added there are clearly defined security parameters within the boundary walls, duty-free import of machinery, equipment and material, freedom from national import regulations, exemption from exchange control regulations, full freedom for repatriation of capital and profits, uninterrupted supply of utilities, no sales tax on input goods, duty-free vehicles allowed under certain conditions, availability of domestic market up to 20 percent, permission to sell obsolete/old machinery in domestic market after payment of applicable duties and taxes. Pervez Ashraf said the government seeks to build and strengthen partnerships with the international organisations with proven professional excellence and productivity.
He said the government supports value addition in industry through a two-tier export transfer regime. Under such programme, exports within a quota will be allowed zero-rated or a lower export tax in a given period, while exports in excess of quota levels will be charged higher out of quota export tax.
He added that the government is also enforcing strict control over imports of products that do not meet the quality and safety standards. The government is focusing on capacity building of the professionals through technical training and skill development programmes. Dr Hilal Hussain Chairman Al-Tuwairqi Group, Joon-Yang Chung, Chairman/CEO of POSCO and others also addressed the event. Sindh Chief Minister Syed Qaim Ali Shah, Saleem H Mandviwala Minister of State for Finance, Choong Joo Choi Ambassador of South Korea and others were also present.