ISLAMABAD, Feb 27: Pakistan Steel will have to re- adjust the prices of its products to compete in the market and increase its sales, said Minister for Commerce, Industries and Production, Razak Dawood.

“No consumer is ready to pay higher prices specially when he could have various steel products on lesser prices from the market,” he stated.

Talking to Dawn, he said that PS was facing a great challenge of increasing its sale and improve its overall performance. “From next financial year 5 per cent tariff will further be reduced, and, under these circumstances, PS is facing a difficult task to compete in the market,” he said.

Maximum tariffs, he said, will be brought down to 25 per cent in 2002-2003, which would allow more foreign steel products in the country, which would make the situation for the mills even more tougher.

The minister for commerce said that Mills had earned good profit, and its sales increased considerably last year. The authorities of the mills also succeeded in reducing the losses by cutting manpower strength.

However, he pointed out, the mills’ profit declined this year and things looked difficult during the next financial year. He said steel industry was in over supply situation, and that mills’ authorities could not be totally blamed for certain reduction in sales and profits.

Asked how could the mills achieve any turnaround, Razak said that it would have to improve its productivity and marketing techniques.

Asked about Rs7 billion corruption and plundering of resources in the mills, he said that National Accountability Bureau (NAB) was handling the issue. “Nothing is now in our hands as all the cases of corruption in the mills had been referred to NAB,” he said adding that those who were guilty of corruption would have to face tough time.

Earlier, the Ministry of Industries and Production had expressed its concern over the declining sale of the Mills and called upon its authorities to look into the issue immediately.

The ministry had asked in writing as to why there had been Rs1.5 billion shortfall in sale. The mills’ sale was Rs4.5 billion in 2001 compared to 2000 when it had reached to Rs6 billion.

Mills’ authorities were maintaining that sale has reduced due to various tariff anomalies, which had not been removed despite President Pervez Musharraf’s instructions to the officials of the ministry of industry and production.

The chairman of the mills also reportedly told the ministry of industries and production that his organization would not be able to pay Rs2.6 billion loans of the banks due to reduction in sale. Also, he said that repair and balancing, modernization and replacement (BMR) work would be affected this year due to paucity of funds. The Mills had paid Rs2.7 billion to lay off its 7000 employees through Voluntary Separation Facility (VSF).