PSM records Rs5.622 billion loss, NA informed

ISLAMABAD: Despite the change in top management, Pakistan Steel Mills continues to run into massive losses and during the first six months of the current financial year it has recorded a loss of well over Rs5 billion.

According to a detailed document recently submitted to the National Assembly, the PSM during the period between July 2009 and January 2010 has recorded an estimated loss of Rs5.622 billion.

In response to a question submitted by Chaudhry Abid Sher Ali of PML-N, Federal Minister for Industries and Production Mir Hazar Khan Bijarani provided the information to the lower house of the parliament.

In the past, the minister said, office of the chairman and chief executive officer (CEO) of PSM used to be manned by one person. But this is no longer the case, eroding the accountability on the part of the CEO.

Therefore, the present government had separated the designation of both the offices and appointed a new CEO to run its administration effectively, he added. The minister said for further improving the PSM management, the government had reconstituted its board of directors by inducting qualified, professional and reputed persons both from public and private sectors.

Another reason, which the minister has explained for PSM’s continuous losses, was shortage of local iron ore, thus, it has to import raw material from abroad which definitely increased its operational costs. Presently, 20,000 tons of local iron ore is being used in the PSM, whereas, its monthly requirement is well over 40,000 tons. During the said time period, the minister said, average production of PSM remained at 44 per cent.

Mr Bijarani said the PSM was focusing on production of those steel grades / qualities which had better profit margins in the market. Moreover, its new management has taken several measures to curtail its expenditures as well as to reduce cost of production. Based on financial assistance from the government, PSM has come up with a new restructuring plan to improve its production and financial health.

Source Dawn News