Japan-based Steel Giant Invests Rs. 1.148 Billion in Pakistan’s Aisha Steel Mills Ltd

A Japanese Company, Marubeni-Itochu Steel Inc. (MISI), has made an investment of Rs. 1.148 billion in Pakistan’s steel producer, Aisha Steel Mills Limited (ASML), through a purchase of its 38.27 million shares.

According to the notification issued to Pakistan Stock Exchange (PSX), MISI has purchased 38,276,000 ordinary shares of ASML from Arif Habib Corporation Limited (as association company of ASML), at a price of Rs. 30 per share, constituting approximately 4.69% of the issued share capital of the steel producer.

Besides, ASML has entered into a strategic alliance with the Japan-based global steel distributor as per Trade Development Agreement to expand the steel business of the company in Pakistan.

According to the deal, the Pakistani steel producer has appointed the Japanese company as its supplier for buying or procuring raw material on a mutually beneficial basis. The company has increased its assets from Rs. 15 billion to Rs. 34.5 billion during the span of the last five years. Moreover, its gross profit also increased manifold — to Rs. 2.3 billion from Rs. 51 million from 2015 to 2020.

Local Mobile Phone Production Surpasses Imports

ASML fell into losses due to a decline in its sales and shrunk gross margins. The declining international flat steel market stressed the local margins and further hampered the profitability in FY 20. Moreover, the effects of the COVID-19 pandemic in the second half of FY20 resulted in a further decline in the company’s profitability.