KARACHI, Feb 19: A Russian delegation is arriving in Pakistan to discuss increase in production capacity up to 1.5 million tons per annum from the current 1.1 million tons with the management of Pakistan Steel (PS).

This was revealed by PS chairman Lt Col (Retd) Mohammad Afzal Khan in a meeting with the members of the Karachi Iron and Steel Merchants Association (KISMA) on Tuesday night.

He did not give any specific date of arrival of Russian delegation but said that the delegation will arrive very soon so that production capacity could be expedited well on time.

Pakistan had already signed a memorandum of understanding (MoU) with the Russian Federation during President Pervez Musharraf’s visit to Russia earlier this month for enhancing production capacity to 1.5 million tons. Pakistan Steel, when running to full capacity will be able to sell various products worth Rs2 billion annually.

“PS is now ready for expansion as demand for our products are increasing. Imported material are now costlier. We are offering competitive prices,” he said.

He painted a rosy picture for PS, saying that sales would touch Rs20 billion by the end of this fiscal after reaching to over Rs10 billion in the first half of 2002-03.

Till January, he said PS had run on 101 per cent capacity utilization as compared to 90 per cent last year. Three years back, the capacity utilization were ranging between 76-77 per cent. “We have set a target of 102 per cent capacity utilization for the current month,” he added.

He said PS’s balance sheet had shown net profit during 2000-01 and 2001-02 and the market share of its products had also improved.

Afzal Khan said that the per capita consumption of steel products in Pakistan is 22 kg as compared to 200 kg in developed countries. However, the per capita consumption in India is 27 kg per year.

The additional burden of manpower in Pakistan Steel has been curtailed drastically. “We have reduced 8,670 extra manpower in the last three years and paid them Rs4.343 billion under golden handshake scheme,” he said adding that the mill had made a total of Rs10 billion in shape of unusual payments which include Rs4.343 billion to employees under GHS and Rs4.6 billion to banks in the last two and a half years.

“PS is now emerging as a profitable public sector organization and it is now clear from any debt trap,” he said.

Earlier, president KISMA Ghulam Mohammad said that KISMA in collaboration with PS will set up KISMA Steel Zone near Pakistan Steel and Port Qasim at 300 acres area where all facilities like containers warehouse, public warehouse, shops, banks, labour colony, hospital and restaurants will be available. He said work on planning and designing of the project has already been started.