LAHORE, Jan 25: There is no need to privatise the Pakistan Steel Mills (PSM) because ‘huge’ foreign money is available for investment in steel sector, a caretaker federal minister said here on Friday.

Speaking at the concluding session of a workshop on ‘Challenges and way forward in steel sector of Pakistan’ organised by the Engineering Development Board, Caretaker Federal Minister for Industries, Production and Special Initiatives Salman Taseer said foreign investors were ‘eager’ to invest in steel because it was one of the fastest growing industries of the world. He said the government would implement recommendations of workshop participants to facilitate development and expansion of the steel sector.

Taseer said billions of dollars were available in the Middle East for investment in the steel sector instead of textile and cement. The Indians were benefiting from the opportunity and expanding their steel industry, but Pakistani businessmen failed to do so. He said foreign investors demanded only good governance for investment.

Engineering Development Board chief executive officer Almas Hyder said the country was facing shortage of steel because no large-scale projects had been completed in the sector after the establishment of the Pakistan Steel Mills. He said the government had now decided to increase the production capacity of steel mills from the existing 1.1 million tons to 10 million tons by 2015 and 20 million tons by 2020.

Federal Industries and Production Secretary Shahab Khawaja said the interest in the steel sector had increased throughout the world. China was signing contracts for purchase of iron ore from South America and other parts of the world to expand its steel production capacity. The Indians were not only expanding their production at home, but also acquiring steel mills abroad.

He said the Pakistan Steel Mills was the only integrated steel production unit in the country, but its production capacity was only one fifth of the demand. Two more big steel mills were now coming up in the private sector because the country had enough natural resources to increase the domestic production. He said the steel industry in the private sector required to improve its efficiency by use of better plants and technology.

Pakistan Steel Mills Chairman Major General Muhammad Javed (retired) said the demand and supply imbalance had pushed the prices of both iron ore and coal beyond the economic reach of steel producers. To cope with the situation, most of the major steel producers of the world had either acquired major ore resources or entered into joint ventures with local firms to ensure steady and economic supplies of raw material.

He said the Pakistan Steel Mills was facing serious difficulties in securing firm orders at affordable prices from the international market to meet its iron ore and coal requirements. The mills had, therefore, decided to use indigenous iron ore and coking coal to increase its production.