Agha Steel Industries has signed a Memorandum of Understanding (MoU) with Horizon Steel company to sell 100,000 metric tons of low-carbon billets worth approximately Rs. 10.5 billion per annum, a press release issued on Monday said.
The MoU ensures that Agha Steel will reliably supply the intermediate steel product that the downstream steel industry uses as raw material. The company uses the latest European electric arc furnace technology supplied from Danieli to produce billets, a transitional steel product that can either be turned into steel bars used in construction or transformed into wire rods to manufacture many high-value engineering products.
Agha Steel Chief Marketing Officer Suleman Lakhani said at the event of signing the MoU,
Thanks to product innovation and heavy investments in R&D, Agha Steel is able to manufacture for the first time in Pakistan refined low-carbon quality billets that are used in the wire rod industry. Until now, the downstream industry heavily relied on expensive imported raw material. That’s going to result in huge import substitution and big benefit for our national kitty. With the realization of this MoU, Agha Steel’s sales are going to grow by 68 percent from the current level within a year. We foresee many such contracts with companies operating in the downstream industry. The availability of good quality raw materials is going to enlarge this industry to its true potential.
Lakhani added that the company is also going public next month to finance its expansion drive.
Unlike most local steel-makers that use the traditional induction furnace for melting scrap, Agha Steel has invested in a high-efficiency and environment-friendly electric arc furnace. It recently increased its billet-making capacity from 250,000 MT to 450,000 MT a year.
Speaking on the occasion, Horizon Steel CEO Shoaib Sultan said it is encouraging to witness that steel products can now be made end-to-end within Pakistan. “I expect the downstream industry will see tremendous growth in coming years and the future looks very bright,” he said.